Chapter 8 Flashcards
list the AIS threats
- natural and political disasters
- software errors
- unintentional acts
- intentional acts
for an act to be fraudulent there must be
- false statement, representation, disclosure
- a material fact
- intent to deceive
- justifiable reliance
- injury or loss suffered by victim
corruption
dishonest conduct by those in power and often involves actions that are illegitimate, immoral, or incompatible with ethical standards
investment fraud
mispresenting or leaving out facts in order to promote an investment that promises fantastic profits with little to no risk
misappropriation of assets
theft of company assets by employees
fraudulent financial reporting
intentional or reckless conduct that results in materially misleading financial statements
ways to detect fraud
understand fraud, improve internal controls based on analysis of fraud risk
fraud triangle
pressure, opportunity, and rationalization
list the pressures
financial, emotional, lifestyle
list opportunities
commit, conceal, convert
rationalizaions
justification, attitude, lack of personal integrity
computer fraud classification
input fraud, processor fraud, computer instructions fraud, data fraud, output fraud
input fraud
alter or falsify computer input
processor fraud
unauthorized system use, including theft of computer time and services
computer instructions fraud
tampering with company software, copying software illegally, using software in an unauthorized manner, and developing software to carry out an unauthorized activity
data fraud
illegally using, copying, browsing, searching, or harming company data
output fraud
displayed or printed output can be stolen, copied, or misused
to prevent fraud ….
organizations must create a climate that makes fraud less likely, increases the difficulty of committing it, improves detection methods, and reduced amount lost if a fraud occurs
segregation of duties
no single employee be given too much responsibility over business transactions or processes
effective segregation of accounting duties is achieved when the following functions are separated
authorization, recording, custody
