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breakpoint clustering

English translation: Signatures are useful only when the fraud is already a fact

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
English term or phrase:breakpoint clustering
Selected answer: Signatures are useful only when the fraud is already a fact
Entered by: hookmv

11:47 Feb 29, 2004
English language (monolingual) [PRO]
Bus/Financial - Accounting / audit
English term or phrase: breakpoint clustering
Control Concerns:
Signatures
- A deterrent but rarely a control
- Breakpoint clustering
- Forgery is easy

This is about preventing and detecting fraud. There is no more context since it's a ppt presentation. Any help appreciated.

Magda
Magda Dziadosz
Poland
Local time: 17:08
Signatures are useful only when the fraud is already a fact
Explanation:
Another possibility and a very long explanation...
My understanding is that the problem with signatures is that they do not give control over the actual fraud situation. Signatures can mainly be used to trace people when the fraud is already a fact, but they are not preventive as such, and therefore their "controlling function" is of less importance.

Therefore, a clustering of signatures at around the time of a fraud incidence, does not in any way mean that signatures can be used as a control measure. You might be interested in finding the culprit, but, more importantly, the damage is already done...

A fictive example:
Let us say that there have been 10 instances of fraud at a company. Mr X's signature appears in conjunction with 5 of these, while Mr Y's signature only appears once. Since Mr X's signature is a lot more frequent that Mr Y's, Mr X appears as more suspicious.
However, Mr X might be working 24/7 and his signature is then more frequent by default. Or maybe he is the one who signs most papers?
At any rate, the fact that Mr X and Mr Y had to leave their signature didn't prevent them from being at the scene of the crime (guilty or not). Therefore signatures can be used for tracing, but not as a (preventive) control measure.

See below for an example to support this possibility.
"Examples of potential frauds which can be displayed in this way, include:
•a buyer placing an exceptional value and volume of orders with a favoured supplier
•a contractor whose invoices are frequently just below a tendering threshold (so called“breakpoint clustering”) and
•an employee whose key card access records correlate to a number of fraud incidents."

http://www.google.se/search?q=cache:uPIaGIpCVYwJ:www.pwc.com...
Selected response from:

hookmv
Sweden
Local time: 17:08
Grading comment
Thanks everyone, and especially Hamo for statistical info. In the given context, though, I decided to follow Veronica's explanations. Thanks again!
Magda
4 KudoZ points were awarded for this answer



SUMMARY OF ALL EXPLANATIONS PROVIDED
4 +1a statistical method for discovering fraud
Roddy Stegemann
3Difícil sin contexto... ver versión abajo
Gabriel Aramburo Siegert
3collecting many potential vulnerabilities in one area.
Lars Helbig
3Signatures are useful only when the fraud is already a fact
hookmv


  

Answers


23 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
Difícil sin contexto... ver versión abajo


Explanation:
Clustering parece referirse acá a recopilación. Breakpoint puede ser punto (lugar) de quiebre como de violación (me suena aplicable al caso de fraudes). Así que sintetizando yo diría: RECOPILACIÓN DE LOS CASOS DE VIOLACIÓN. Observa que me estoy arriesgando sin contexto, y esto es sólo para tu consideración. Un feliz domingo desde Medellín.

Gabriel Aramburo Siegert
Local time: 10:08
Native speaker of: Native in SpanishSpanish
Grading comment
can't read Spanish :)
Login to enter a peer comment (or grade)
The asker has declined this answer
Comment: can't read Spanish :)

1 hr   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
a statistical method for discovering fraud


Explanation:
Clustering is a statistical procedure with many applications, algorithms, and methods of application. Each procedure as a different set of rules by which otherwise large amounts of randomly appearing data are grouped into clusters. The rules by which these clusters are formed are called thresholds, breakpoints, or decision rules (all names for the same statistical notion) which determine how individual data points are to be classified.

One can easily imagine that potentially fraudulent signatures are detected by such a sorting method.

--------------------------------------------------
Note added at 3 hrs 19 mins (2004-02-29 15:06:17 GMT)
--------------------------------------------------

Choosing the correct breaking point is a concern of all statisticians who utilise clutering techniques. It is perfectly reasonble that problems related to statistical controls would be listed as a matter of concern in detecting fraudulent signatures.

Roddy Stegemann
United States
Local time: 08:08
Native speaker of: Native in EnglishEnglish

Peer comments on this answer (and responses from the answerer)
agree  Vicky Papaprodromou
36 mins
neutral  Lars Helbig: Clustering can also just mean that things are present in a cluster or a higher than normal concentration in a small area. If it were a methode to detect frauds it would not stand under the heading 'concerns'
1 hr
  -> In an effort to be as polite as possible, who are you to know what should be listed under other people's and organizations list of concerns?
neutral  EKM: While this is possible, the right approach to this question would be to ask the customer for additional information. In the absence of more context, we can only provide more or less substantiated guesses.
1 day 19 hrs
  -> Then why don't you ask and stop criticizing those who provide reasonable and possible responses?
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23 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
collecting many potential vulnerabilities in one area.


Explanation:
I think something like having a "single point of failure" is meant here. You cluster you the points at wich something can go wrong into a single issue.

--------------------------------------------------
Note added at 3 hrs 27 mins (2004-02-29 15:14:18 GMT)
--------------------------------------------------

In answer to Hamo\'s response to my comment under his own answer:

I understood the text to be a list of concerns they have with Signatures. The fact, that signatures are easy to forge is one concern. Requiering a signatur may deter some people, but those that go ahead and forge the signature are rarely cought because it did not match. This is also a concern.

How would a statistical methode fit into that?

I think it is far more likely that they are concerned that signatures combine many vulnerabilities.

Lars Helbig
Germany
Local time: 17:08
Native speaker of: Native in GermanGerman
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2 days 11 hrs   confidence: Answerer confidence 3/5Answerer confidence 3/5
Signatures are useful only when the fraud is already a fact


Explanation:
Another possibility and a very long explanation...
My understanding is that the problem with signatures is that they do not give control over the actual fraud situation. Signatures can mainly be used to trace people when the fraud is already a fact, but they are not preventive as such, and therefore their "controlling function" is of less importance.

Therefore, a clustering of signatures at around the time of a fraud incidence, does not in any way mean that signatures can be used as a control measure. You might be interested in finding the culprit, but, more importantly, the damage is already done...

A fictive example:
Let us say that there have been 10 instances of fraud at a company. Mr X's signature appears in conjunction with 5 of these, while Mr Y's signature only appears once. Since Mr X's signature is a lot more frequent that Mr Y's, Mr X appears as more suspicious.
However, Mr X might be working 24/7 and his signature is then more frequent by default. Or maybe he is the one who signs most papers?
At any rate, the fact that Mr X and Mr Y had to leave their signature didn't prevent them from being at the scene of the crime (guilty or not). Therefore signatures can be used for tracing, but not as a (preventive) control measure.

See below for an example to support this possibility.
"Examples of potential frauds which can be displayed in this way, include:
•a buyer placing an exceptional value and volume of orders with a favoured supplier
•a contractor whose invoices are frequently just below a tendering threshold (so called“breakpoint clustering”) and
•an employee whose key card access records correlate to a number of fraud incidents."

http://www.google.se/search?q=cache:uPIaGIpCVYwJ:www.pwc.com...

hookmv
Sweden
Local time: 17:08
Native speaker of: Swedish
PRO pts in category: 4
Grading comment
Thanks everyone, and especially Hamo for statistical info. In the given context, though, I decided to follow Veronica's explanations. Thanks again!
Magda
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