Risk analytics glossary

Definition

Audit Trail

An audit trail is the chronological record of who created, changed, or deleted a transaction or master data record, and when. Its completeness determines whether a finding can be evidenced and defended.

Definition

Benford's Law

Benford's Law describes the expected frequency of leading digits in many naturally occurring numeric datasets, where the digit 1 appears as the leading digit about 30% of the time and 9 about 5%. Material deviation can indicate fabricated or manipulated figures.

Definition

Bid Rigging

Bid rigging is the manipulation of a competitive procurement process so that the outcome is predetermined. Bidders coordinate rather than compete, through mechanisms such as cover bidding, bid rotation, market allocation, or bid suppression.

Definition

Change Order Abuse

Change order abuse is the use of post-award contract variations to increase contract value beyond what competitive tender would have permitted. The award is genuinely competitive; the final settled value is not.

Definition

Conflict of Interest

A conflict of interest exists where an employee's personal interest could improperly influence a business decision they influence or control. In transaction data it most often appears as an undisclosed relationship between an employee and a supplier.

Definition

Continuous Controls Monitoring

Continuous controls monitoring is the automated testing of control operation against full transaction populations on an ongoing schedule, rather than through periodic sample-based review. Its defining benefit is timing: exceptions surface while they can still be corrected or recovered.

Definition

Control Override

A control override is the deliberate bypass of a configured system control so a transaction can proceed — a matching tolerance overridden, a blocked vendor released, an approval step skipped. The control operated as designed and was set aside.

Definition

Discount Leakage

Discount leakage is margin lost when discounts are granted beyond approved policy, applied without authorisation, or accumulated across multiple mechanisms. Unlike pricing error, the list price is correct — the deduction from it is not.

Definition

Duplicate Payment

A duplicate payment is a second disbursement made for an invoice or obligation that has already been paid. It arises from exact re-entry of the same invoice, near-duplicate entry under a different vendor code or invoice format, or partial payments that together settle the same liability twice.

Definition

ERP Data Model

An ERP data model describes the tables, keys, and relationships that connect records in an enterprise resource planning system — how an invoice links to a purchase order, a receipt, a vendor, and a payment. Analytics cannot run until those relationships are established.

Definition

Expense Splitting

Expense splitting is dividing a single expense across multiple claims, dates, or categories so that each part falls below an approval or receipt threshold. It is a threshold-avoidance technique rather than a category of spend.

Definition

Explainable Finding

An explainable finding is an analytic result accompanied by the underlying transactions, the logic that produced it, and the data lineage behind it, so a reviewer can trace how the conclusion was reached and defend it in audit.

Definition

Facilitation Payment

A facilitation payment is a small payment made to a public official to secure or speed up a routine action to which the payer is already entitled, such as a permit or customs clearance. It is prohibited under most anti-bribery regimes, including the UK Bribery Act.

Definition

Financial Leakage

Financial leakage is the loss of value through process and control failure rather than through business decision or customer default. It includes overpayments, duplicate payments, unclaimed discounts and rebates, unbilled revenue, and excess pricing against contract.

Definition

Ghost Employee

A ghost employee is a payroll record that receives payment without a corresponding real, currently employed worker. The category covers fictitious employees, duplicate records for one person, retained leavers, and no-show workers.

Definition

Journal Entry Testing

Journal entry testing is the examination of individual general ledger postings for indicators of error, manipulation, or control failure. It targets manual entries in particular, because these bypass the validation applied to system-generated postings.

Definition

Purchasing Card (P-Card)

A purchasing card is a company payment card issued to employees for low-value business purchases, bypassing the full requisition and purchase order process. The efficiency gain comes at the cost of reduced preventive control.

Definition

Revenue Leakage

Revenue leakage is earned revenue a business never collects because of process or control failure. Common causes are unbilled deliveries, discounts applied beyond policy, contract escalations never implemented, duplicate credit notes, and cash received but never applied.

Definition

Risk Analytics

Risk analytics is the application of analytical tests to enterprise transaction and master data in order to identify fraud, error, leakage, and control failure. It differs from business intelligence in purpose: it looks for exceptions rather than reporting performance.

Definition

Segregation of Duties

Segregation of duties is the control principle that no single person should be able to complete a sensitive business process end to end without independent review. Typical conflicts include creating a vendor and paying it, or posting a journal and approving it.

Definition

Suspense Account

A suspense account temporarily holds transactions that cannot yet be classified to their final account. Balances are expected to clear quickly; balances that accumulate across periods indicate a reconciliation breakdown.

Definition

Three-Way Match

A three-way match is the control that compares a purchase order, a goods receipt, and a supplier invoice before payment is released. It confirms that what was ordered, what was received, and what is being billed agree on quantity and value.

Definition

Vendor Master Data

Vendor master data is the set of records defining each supplier a business can transact with, including name, bank details, tax identifiers, addresses, contacts, and payment terms. Its quality determines whether payment and procurement analytics can be trusted.