Enhancing fraud detection and prevention in U.S. financial institutions through analytics-enabled forensic auditing

Aims: This study examines how analytics-enabled forensic auditing enhances fraud detection and fraud prevention within U.S. financial institutions operating in increasingly digitized environments.

Study Design: Applied, descriptive research design.

Place and Duration of Study: The study was conducted in the United States and involved professionals working in financial institutions across forensic auditing, internal audit, compliance, and fraud risk management functions. Data was collected during the study period through questionnaire distribution and follow-up interviews.

Methodology: A mixed-methods approach was adopted. Structured questionnaires were administered to professionals involved in forensic auditing and related control functions, complemented by follow-up interviews to provide qualitative insights. Of the 100 questionnaires distributed, 47 fully completed responses were included in the final analysis. Quantitative data were analyzed using descriptive statistical techniques, while qualitative responses were analyzed thematically to enhance contextual understanding of analytics adoption in forensic auditing practices.

Results: The findings indicate that forensic auditing is widely utilized within U.S. financial institutions and that data analytics plays a significant role in supporting fraud detection and prevention activities. Respondents reported positive perceptions regarding the effectiveness of analytics-enabled forensic auditing, particularly in improving detection accuracy, timeliness, and proactive fraud monitoring. The results further suggest that the integration of analytics into forensic auditing contributes to stronger internal controls and enhanced governance structures.

Conclusion: Analytics-enabled forensic auditing represents a valuable enhancement to traditional forensic auditing approaches and supports more effective fraud risk management within the U.S. financial system in increasingly digital financial environments. The study highlights the importance of integrating data analytics into forensic audit functions to improve organizational resilience against fraud.