Financial Data Anomaly Detection via Ontology Mapping
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Solution Overview
Problem
Current auditing methods rely on manual sampling of financial accounting data, which is costly, time-consuming, and inefficient, failing to provide comprehensive analysis of all transactions, leading to potential errors and misstatements.
Innovation Solution
An online method and apparatus for analyzing financial accounting data that uploads data to a server for analysis, using an accounting ontology to identify anomalies, such as contra and reversal transactions, and presenting results to the user for investigation, allowing for the examination of all transactions and reducing detection risk.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If manual sampling methods are used for auditing financial accounting data, then the audit process is simpler and less resource-intensive, but the analysis is incomplete and time-consuming
Solution Approach 1:
The patent replaces manual mechanical sampling processes with an automated computer-based analysis system. The system automatically processes entire populations of financial accounting data using computational algorithms, eliminating the need for manual sampling while significantly improving both speed and reliability of audit detection.
Solution Approach 2:
The system changes the fundamental parameters of audit processing from manual sampling to comprehensive automated analysis. By transforming the scale and method of data processing, the system achieves complete coverage of financial transactions while maintaining efficiency through automation and computational optimization.
2Reliability
If 100% coverage of transactions is achieved through comprehensive analysis, then detection risk is reduced, but the process becomes costly and time-consuming
Solution Approach 1:
The patent employs automated computational systems to perform comprehensive analysis of all transactions. The computer-based algorithms efficiently process entire populations of data without manual intervention, reducing the time required for 100% coverage analysis while maintaining complete detection capability.
Solution Approach 2:
The system performs self-service analysis by automatically identifying, evaluating, and reporting anomalies in financial data without requiring continuous manual oversight. The automated detection mechanisms continuously monitor and analyze transactions, providing comprehensive coverage while minimizing time investment.
3Quantity of substance
If manual sampling is used, then resource consumption is lower, but the analysis cannot provide comprehensive summary of errors and anomalies
Solution Approach 1:
The patent replaces simple manual sampling processes with a comprehensive automated analysis system. The computer-based system automatically processes, evaluates, and summarizes all transactions and anomalies, providing complete data coverage while managing complexity through structured computational algorithms and integrated processing.
Data Source
AI summary
In an on-line method of analyzing financial accounting data, uploaded financial accounting data is received at a server (2) from a client computer (3). The data is analyzed at the server (2) to identify anomalies in the data. A display is provided at the client computer (3) representing the anomalies that have been identified. Further, in a method of pre-processing financial accounting data prior to analyzis of the data, the financial accounting data is abstracted to correspond to a pre-stored accounting ontology. Further, in a method of analyzing financial accounting data, the method checks the data for violation of a particular state to identify inconsistent combinations of values in the data.