Case Study - Analysis of Purchase Orders in Washington, DC

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Kreutzer, Kevin K.
A multitude of tools can be utilized to assist auditors in determining areas of interest for further review in the performance of an examination. Through an analysis of purchase order data for the District of Columbia from 2008 through 2014 used as a case study, it may be possible to determine if relationships exist that merit further review of internal auditors, external auditors, and fraud examiners. Benford's Law analysis and testing through the use of z-Scores, mean average deviation, and Chi-Square analysis, as well as the usage of relative size factor testing and descriptive statistics will help identify common red flags that may arise during the course of a review or examination. This type of analysis can provide a means for selection to later be performed during audit sampling.