Unsupervised analytical review
First Claim
1. A computer implemented method of unsupervised financial analytical review, comprising:
- extracting features, by a computer having stored a financial dataset, of each transaction in the financial dataset;
generating, by the computer, a transaction-by-attribute/value matrix from the extracted features of each transaction in the financial dataset;
calculating, by the computer, distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the distinctiveness weights signify how much more likely an attribute/value is to occur in conjunction with a particular transaction than may be expected on the basis of chance;
calculating, by the computer, materiality weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the materiality weights signify an importance or significance of an amount, transaction or discrepancy with a particular transaction;
calculating, by the computer, combined weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the combined weight is calculated by adding each of the materiality weights for each attribute/value in the transaction-by-attribute/value matrix to respective distinctiveness weights not equal to zero of the distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix;
applying, by the computer, the combined weights to the transaction-by-attribute/value matrix to generate a weighted transaction-by-attribute/value matrix;
factorizing, by the computer, the weighted transaction-by-attribute/value matrix into a transaction-by-concept matrix; and
generating, by the computer, output of the transaction-by-concept matrix enabling significant patterns and trends to be identified;
wherein the extracting, the generating of the transaction-by-attribute/value matrix, the calculating of the distinctiveness weights, the calculating of the materiality weights, the calculating of the combined weights, the applying of the combined weights, the factorizing, and the generating of the output are performed regardless of a number, type, or monetary amount of transactions in the financial dataset, regardless of a number or type of features associated with each transaction in the financial dataset, and regardless of a provenance of the financial dataset.
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Abstract
Disclosed is a method generally applicable to any financial dataset for the purposes of: (1) determining the most important patterns in the given dataset, in order of importance; (2) determining any trends in those patterns; (3) determining relationships between patterns and trends; and (4) allowing quick visual identification of anomalies for closer audit investigation. These purposes generally fall within the scope of what in financial auditing is known as ‘analytical review’. The current method'"'"'s advantages over existing methods are that is fully independent of the financial data subject to analysis, requires no background knowledge of the target business or industry, and is both scalable (to large datasets) and fully scale-invariant, requiring no a priori notion of financial materiality. These advantages mean, for example, that the same method can be by an external auditor for many different clients with virtually no client-specific customization, directing his attention to the areas where more detailed audit investigation may be required. Compared with existing methods, the current method is extremely flexible, and because it requires no a priori knowledge, saves significant time in understanding the fundamentals of a business.
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Citations
19 Claims
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1. A computer implemented method of unsupervised financial analytical review, comprising:
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extracting features, by a computer having stored a financial dataset, of each transaction in the financial dataset; generating, by the computer, a transaction-by-attribute/value matrix from the extracted features of each transaction in the financial dataset; calculating, by the computer, distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the distinctiveness weights signify how much more likely an attribute/value is to occur in conjunction with a particular transaction than may be expected on the basis of chance; calculating, by the computer, materiality weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the materiality weights signify an importance or significance of an amount, transaction or discrepancy with a particular transaction; calculating, by the computer, combined weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the combined weight is calculated by adding each of the materiality weights for each attribute/value in the transaction-by-attribute/value matrix to respective distinctiveness weights not equal to zero of the distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix; applying, by the computer, the combined weights to the transaction-by-attribute/value matrix to generate a weighted transaction-by-attribute/value matrix; factorizing, by the computer, the weighted transaction-by-attribute/value matrix into a transaction-by-concept matrix; and generating, by the computer, output of the transaction-by-concept matrix enabling significant patterns and trends to be identified; wherein the extracting, the generating of the transaction-by-attribute/value matrix, the calculating of the distinctiveness weights, the calculating of the materiality weights, the calculating of the combined weights, the applying of the combined weights, the factorizing, and the generating of the output are performed regardless of a number, type, or monetary amount of transactions in the financial dataset, regardless of a number or type of features associated with each transaction in the financial dataset, and regardless of a provenance of the financial dataset. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9)
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10. A computer implemented method of unsupervised financial anomaly detection, comprising:
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extracting, by a computer having stored a financial dataset, features of each transaction in the financial dataset; generating, by the computer, a transaction-by-attribute/value matrix from the extracted features of each transaction in the financial dataset; calculating, by the computer, distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the distinctiveness weights signify how much more likely an attribute/value is to occur in conjunction with a particular transaction than may be expected on the basis of chance; calculating, by the computer, materiality weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the materiality weights signify an importance or significance of an amount, transaction or discrepancy with a particular transaction; calculating, by the computer, combined weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the combined weight is calculated by adding each of the materiality weights for each attribute/value in the transaction-by-attribute/value matrix to respective distinctiveness weights not equal to zero of the distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix; applying, by the computer, the combined weights to the transaction-by-attribute/value matrix to generate a weighted transaction-by-attribute/value matrix; factorizing, by the computer, the weighted transaction-by-attribute/value matrix into a transaction-by-concept matrix; and generating, by the computer, output of the transaction-by-concept matrix enabling anomalies to be identified; wherein the extracting, the generating of the transaction-by-attribute/value matrix, the calculating of the distinctiveness weights, the calculating of the materiality weights, the calculating of the combined weights, the applying of the combined weights, the factorizing, and the generating of the output are performed regardless of a number, type, or monetary amount of transactions in the financial dataset, regardless of a number or type of features associated with each transaction in the financial dataset, and regardless of a provenance of the financial dataset. - View Dependent Claims (11, 12, 13, 14, 15, 16, 17, 18)
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19. A method of unsupervised financial analytical review and anomaly detection, comprising the steps of:
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extracting features, by a computer having stored a financial dataset, of each transaction in the financial dataset; generating, by the computer, a transaction-by-attribute/value matrix from the extracted features of each transaction in the financial dataset; calculating, by the computer, distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the distinctiveness weights signify how much more likely an attribute/value is to occur in conjunction with a particular transaction than may be expected on the basis of chance; calculating, by the computer, materiality weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the materiality weights signify an importance or significance of an amount, transaction or discrepancy with a particular transaction; calculating, by the computer, combined weights for each attribute/value in the transaction-by-attribute/value matrix, wherein the combined weight is calculated by adding each of the materiality weights for each attribute/value in the transaction-by-attribute/value matrix to respective distinctiveness weights not equal to zero of the distinctiveness weights for each attribute/value in the transaction-by-attribute/value matrix; applying, by the computer, the combined weights to the transaction-by-attribute/value matrix to generate a weighted transaction-by-attribute/value matrix; factorizing, by the computer, the weighted transaction-by-attribute/value matrix into a transaction-by-concept matrix; and generating, by the computer, output of the transaction-by-concept matrix so as to transform the financial dataset into useful actionable information enabling identification of transactions or groups of transactions that merit closer scrutiny; wherein the extracting, the generating of the transaction-by-attribute/value matrix, the calculating of the distinctiveness weights, the calculating of the materiality weights, the calculating of the combined weights, the applying of the combined weights, the factorizing, and the generating of the output are performed regardless of a number, type, or monetary amount of transactions in the financial dataset, regardless of a number or type of features associated with each transaction in the financial dataset, and regardless of a provenance of the financial dataset.
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Specification