Catch Ghost Employees with Excel Copilot

Internal audit requires precision, yet the volume of data often forces auditors to rely on sampling methods that risk missing fraudulent activities. Identifying "ghost employees"—individuals on the payroll who do not actually work for the company—is a critical control test that historically required hours of manual VLOOKUPs and cross-referencing.

By leveraging Excel Copilot, Internal Auditors can now transform this forensic analysis into a conversational query. This workflow automates the comparison between payroll disbursements and physical or digital access logs to flag anomalies instantly.

Why This Workflow Matters

Ghost employee fraud costs organizations an average of 5% of annual revenue. Using Excel Copilot shifts the audit approach from random sampling to 100% population testing. This workflow reduces data reconciliation time by approximately 75%, allowing auditors to focus on investigating the red flags rather than finding them.

Prerequisites

• Microsoft 365 Copilot License: Active subscription required.
• Clean Data Sets: Two separate sheets or tables within one workbook: one for Payroll Data (must include Employee ID, Name, Salary) and one for Access/Badge Logs (must include Employee ID, Timestamp).
• Table Formatting: Data must be formatted as official Excel Tables (Ctrl+T).

Step-by-Step Guide

Step 1: Standardize and Format Data Tables

Copilot works best with structured data. Ensure your payroll ledger and building access logs are in the same workbook but distinct tables. Rename your tables to tbl_Payroll and tbl_AccessLogs for better referencing.

Step 2: Cross-Reference Datasets

Instead of writing complex XLOOKUP or INDEX/MATCH formulas, instruct Copilot to identify discrepancies between the two tables. We want to find IDs present in Payroll but absent in Access Logs.

Step 3: Quantify the Risk Exposure

Once anomalies are flagged, you need to assess materiality. Use Copilot to aggregate the financial impact of the identified "Potential Ghost" employees.

Step 4: Generate Audit Narrative

Drafting the finding for the audit report is the final step. Copilot can synthesize the data analysis into a professional summary.

Pro Tips

• Fuzzy Matching Warning: Copilot is literal. If your payroll system uses "00123" and access logs use "123", Copilot may miss the match. Always standardize key identifiers first.
• Triangulation: Don't rely on just one data source. Add a third table for "VPN Logs" or "Email Activity" to reduce false positives (e.g., remote workers who don't swipe badges).
• Privacy Compliance: Ensure you are working within a secure, compliant instance of Microsoft 365, as payroll data contains PII.

Common Mistakes to Avoid

• Ignoring Date Ranges: Comparing January payroll against February access logs will generate false positives. Always verify the time periods align.
• Overlooking Terminations: Recently terminated employees might appear on the final payroll run but have their access revoked immediately. Cross-reference with the "Terminated Users" list.
• Unformatted Ranges: Attempting to use Copilot on raw data ranges usually results in errors. Always convert to Tables first.

Frequently Asked Questions