Forensic Analytics by Mark Nigrini & B.Com.(HONS) MBA PH.D

Author:Mark Nigrini & B.Com.(HONS), MBA, PH.D.
Language: eng
Format: epub
Publisher: Wiley
Published: 2011-04-01T16:00:00+00:00

Running the RSF Test

The test seems just like the largest subsets test with a complication or two. This test is actually quite difficult to program. One complication is that a subset with only one record cannot have an RSF because there is no second largest number. It is usually a good idea to delete all records less than 1.00, or 10.00 to avoid small numbers influencing the results. Including negative numbers could give us a negative RSF, which is quite meaningless. Also, small positive numbers might give highly inflated RSFs if we (say) divided $8,000 by $0.50.

It is quite difficult to identify the second largest amount in each subset. The main steps in running the test are to delete the small and irrelevant numbers, and then to delete all the subsets with only one record. We then need to identify the largest and second largest numbers for each subset. We also need to establish a rule that would apply if the largest and the second largest numbers were both equal. The logic that could be used with any data analysis program is:

1. Sort the data by Subset and by Amount descending and delete all numbers less than (say) 1.00.

2. Identify the subsets that have only one numeric record and delete these records.

3. Identify the largest Amount for each subset and also calculate the Count for each subset.

4. Identify those cases where any Amount appeared more than once in a subset.

5. Identify those subsets where the count of the largest amount was two or more and calculate the RSF of those subsets to be 1.00. Save these results.

6. Delete all the subsets with RSFs equal to 1.00 from the main data table.

7. Identify and remove the maximum Amount from each subset.

8. Identify the maximum Amount of the remaining records (which will be the second largest number).

9. Calculate the RSF and the other statistics to be included in the results table (e.g., the Subset number, the largest Amount, the second largest Amount, the count, and the RSF itself).

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