Uncovering white-collar crime with Process Mining
Whether ERP, inventory control systems or MES – business processes are nowadays almost entirely translated into IT systems. This makes IT audits increasingly more important because white-collar criminals exploit weaknesses in these systems to enrich themselves and damage the company.
To give students a glimpse into the day-to-day business operation and create awareness for IT auditing and the strategies used by white-collar criminals, hacking contests have proven very successful.
Celonis supported the White-Collar Hacking Contest organized by the Chair for Information Systems of the Technical University of Munich and the SAP University Competence Center Munich, by providing its software. Furthermore, Celonis Business Analyst Sebastian Walter taught the students in an all-day crash course how to use the tools of the trade and operate Process Mining – which served to reconstruct and visualize digital traces inside the ERP system of an imaginary company.
The twenty contest participants working in four teams had to embezzle funds from an imaginary company using business data from the SAP HANA database. At the same time, they were asked to locate funds embezzled by other teams employing real-time analysis of the SAP systems with Celonis Process Mining. The team that successfully embezzled the most money without getting caught while locating funds embezzled by others was selected as the contest winner.
“The White-Collar Hacking Contest provides an excellent opportunity to teach students how to operate enterprise software and how to conduct IT audits”, explains Dr. Michael Schermann, lecturer and researcher at the Chair for Information Systems. “The students are hackers and investigators at the same time.”
Aside from the two course lecturers, the jury also included five representatives of the Forensic Accounting program taught at the De Montfort University (Leicester, UK), who came especially to attend this event. The jury assessed the plausibility of the frauds and whether the students investigated successfully.
Team “Sum Ting Wong’s four-man team” won the White-Collar Hacking Contest which was endowed with 2.34 million Euros. The four teams successfully implemented 14 frauds and uncovered eight of them. “The most intriguing fraud was one where prices were fixed with a supplier over a long period and these agreements were presented internally as sales successes, leading to bonuses”, explains Schermann. “This led to a twofold damage: unjustified bonuses and inflated prices.”
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