Page 48 - CMA Journal (Nov-Dec 2024)

Focus Section

Key Benefits of AI in Fraud Detection

• Anomaly Detection – AI identifies unusual transac-
tion behaviors, such as sudden spending spikes,
irregular payment patterns, or unauthorized access to
financial data. By detecting anomalies early, business-
es can prevent fraud before it escalates.
• Continuous Monitoring – Unlike traditional methods
that rely on periodic audits, AI operates 24/7, scanning
transactions in real-time to detect fraud at its earliest
stages, ensuring a proactive rather than reactive
approach.

• Pattern Recognition – Machine learning analyzes
historical fraud data to detect common indicators,
• Advanced Data Processing – AI processes vast
such as suspicious vendor transactions, abnormal
amounts of data far more efficiently than manual
invoice patterns, or signs of internal collusion. AI then
methods, ensuring comprehensive risk evaluation and
flags similar patterns in future transactions, improving
minimizing the chances of overlooking critical details.
both speed and accuracy in fraud detection.
• Scenario Analysis – AI simulates various risk scenarios Future of AI in Accounting
under different conditions, allowing accountants to
assess how factors such as interest rate changes or The future of AI in accounting is promising. As AI
economic downturns impact financial stability. advances, its capabilities in decision-making, fraud
detection, and risk assessment will continue to
Role of AI in Fraud Detection improve. Beyond these areas, AI will further enhance

tax optimization, financial forecasting, and client
Detecting fraud has always been a challenge for
advisory services.
accountants, auditors, and financial professionals. As
fraudulent activities become more sophisticated, For accounting professionals, this evolution presents
traditional methods—such as manual audits and both opportunities and challenges. While AI automates
predefined rules—often prove inadequate. Fraudulent routine tasks, it enables accountants to focus on strategic
transactions can be concealed within large volumes of decision-making and high-value services. By adopting AI
legitimate financial data, making real-time detection and integrating it into their expertise, accountants can
increasingly difficult. establish themselves as key contributors to the digital
transformation of the industry.
AI offers advanced tools to detect and prevent fraud
more effectively. Machine learning models can be trained About the Author: Uzair Ghouri, a Fellow member of ICMA
on historical fraud data to identify subtle patterns, International, is the Senior Finance Lead for Pakistan, Kazakhstan,
and Afghanistan at Medtronic Pakistan. With over 26 years of
behaviors, and anomalies that may indicate fraudulent
experience in pharmaceutical and medical devices, he provides
activity. Once trained, these models continuously strategic financial leadership, ensuring accurate insights and
monitor transactions, flagging suspicious activities with effective decision-making across the region.
far greater accuracy than traditional methods.

Digital technology has several features that can make it much

easier for teachers to pay special attention to all their students.

– Bill Gates

46 ICMA’s Chartered Management Accountant, Jan-Feb 2025 BACK TO CONTENTS PAGE