Chapter 5 - PowerPoint Presentation

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Uploaded On 2016-06-15

Chapter 5 - PPT Presentation

Computer Fraud Copyright 2012 Pearson Education 5 1 Learning Objectives Explain the threats faced by modern information systems Define fraud and describe the process one follows to perpetuate a fraud ID: 363968

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Slide1

Chapter 5

Computer Fraud

1Slide2

Learning Objectives

Explain the threats faced by modern information systems.

Define fraud and describe the process one follows to perpetuate a fraud.Discuss who perpetrates fraud and why it occurs, including:the pressures, opportunities, and rationalizations that are present in most frauds.

Define computer fraud and discuss the different computer fraud classifications.

Explain how to prevent and detect computer fraud and abuse.

2Slide3

Common Threats to AIS

Natural Disasters and Terrorist ThreatsSoftware Errors and/or Equipment Malfunction

Unintentional Acts (Human Error)Intentional Acts (Computer Crimes)

3Slide4

What Is Fraud?

Gaining an unfair advantage over another personA false statement, representation, or disclosure

A material fact that induces a person to actAn intent to deceiveA justifiable reliance on the fraudulent fact in which a person takes actionAn injury or loss suffered by the victim

Individuals who commit fraud are referred to as white-collar criminals.

4Slide5

Forms of Fraud

Misappropriation of assetsTheft of a companies assets.

Largest factors for theft of assets:Absence of internal control systemFailure to enforce internal control systemFraudulent financial reporting“…intentional or reckless conduct, whether by act or omission, that results in materially misleading financial statements” (The Treadway Commission).

5Slide6

Reasons for Fraudulent Financial Statements

Deceive investors or creditors

Increase a company’s stock priceMeet cash flow needs

Hide company losses or other problems

6Slide7

Treadway Commission Actions to Reduce Fraud

Establish environment which supports the integrity of the financial reporting process.

Identification of factors that lead to fraud.

Assess the risk of fraud within the company.

Design and implement internal controls to provide assurance that fraud is being prevented.

7Slide8

SAS #99

Auditors responsibility to detect fraudUnderstand fraud

Discuss risks of material fraudulent statementsAmong members of audit teamObtain informationLook for fraud risk factorsIdentify, assess, and respond to risk

Evaluate the results of audit tests

Determine impact of fraud on financial statements

Document and communicate findings

See Chapter 3Incorporate a technological focus

8Slide9

The Fraud Triangle

Three conditions that are present when Fraud occurs.Slide10

Pressure

Motivation or incentive to commit fraud

Types:

Employee

Financial