IT Fraud
Evaluate the factors that add to corporate fraud
The business fraud can be credited to conditions emerging from deceptive monetary reporting and misappropriation of possessions. These conditions are 3 and all 3 features of the fraud triangle have to exist for fraud to take place. Management or staff members have to have the reward or pressure to dedicate fraud, see the opportunity emerge and have the ability to justify the occasion.
Incentive/Pressure
Management or perhaps others in the workforce will have benefits or conditions of pressure to carry out fraud. If the choice is made by management to publish illegal monetary statements, the most typical reason for this will be threat by financial, market or entity operating conditions to the monetary security and productivity of the business. Extreme pressure is put on management to satisfy the projection made by industry experts, internal company projections or to pay back loans (Fox School of Business, 2009). The misappropriation of business assets might be done due to individual monetary pressure such as home mortgage, or a non-sharable trouble such as substance abuse or gambling loans (Wells 2007).
Opportunities
The misstatements of monetary statements take place when the opportunity to do so exists. In sectors where considerable judgments and projections are included, the monetary statements of these businesses can be manipulated. The opportunity of theft exists in all business, however the honesty and integrity of the workforce determines if fraud will actually take place. As soon as there is accessibility to money, stock or other useful possessions, workers will capitalize on the opportunity. If a company does not have appropriate internal controls and tasks are not appropriately set apart, the opportunity to abuse possessions considerably rises (Fox School of Business, 2009).
Attitudes/Rationalization
The attitude of upper management towards financial reporting sets the tone of the company. If there are lack of ethical values within a company, management and staff members could be in an environment that triggers them to justify carrying out a dishonest act. If upper management shows neglect for the financial reporting procedures, regularly publishes excessively positive projections, or become obsessed with living up to market expectations, deceitful reporting is most likely (Fox School of Business, 2009).
The impact to the auditing profession and the firm conducting the audit
How companies can use IT systems to create fraud and how IT auditors need to use healthy scepticism when executing the audit procedures in these areas.
Automated info systems have actually become an important part in the daily operations of modern-day companies. This has actually permitted even more work to be finished with less individuals and a greater level of information to be incorporated into the work with the sophisticated capabilities of computer systems. It is essential for business to take the essential preventative measures required in shielding their systems and picking the correct internal controls for information technology as well as audit reporting. This consists of examining the efficiency of their internal controls. This is usually done by asking the following questions:.
* Is the design and operation of the internal control system current with technological innovations?
* Is the internal control system and reporting in compliance with Sarbanes-Oxley Act of 2002?
* Does the existing system determine existing controls which are mishandled, redundant, and expensive?
* Is the internal control system and showing enhanced performance and overall company efficiency?
The responses to these points must be evaluated by management to guarantee that the criterion of the information technology is not only regulated but also controlled.
An audit report has 3 general features which are made use of to report a business's financial statements. These reports show whether the financial statements exist in conformity with internationally accepted accounting concepts. Auditors utilize their reports to highlight any uncommon elements of…
Information Technology Acts What were the advances in information technology that resulted in new ethical issues necessitating the creation of each act? One of the common challenges that most regulations will face is keeping up with the changes in the technology. As the law, is designed to provide everyone with some kind of protection against potential abuse. However, improvements in technology have transformed the way that everyone is living their daily lives.
The need for continually creating and updating the security techniques and technologies involved in an enterprise system is the ethical responsibility of the IT professional. In order to successfully protect the information and intellectual property assets of a firm, an IT professional also needs to make a personal commitment to stay as current as possible on existing and future technologies (Pemberton, 1998). This commitment needs to be supported by the
It is possible to avoid becoming a victim of such crimes through some basic precautionary methods. Firstly, it is essential to store or discard personal information in a careful manner. This means personal documents should not be left lying around or shared through internet. All personal information should be stored in a secure place. All sorts of old receipts, expired cards, bank statements and checks should be disposed of
For example, it is no longer advisable to use a paper-based payroll, as apart from being more likely to become subject to fraud, it is an environmental hazard. Imagine the filing needs for a payroll for 100 people in one year only. Also, there's the consideration that almost everyone has and uses email. Electronic mail enables immediate correspondence between separate entities and quicker responses to urgent matters. More than this,
The company's consistent top line revenue growth also illustrates it has been successful in transforming its supplier network into one that operates more on knowledge, less on purely price or product decisions. As a result the company is capable of competing more at the process level and less at the purely price-driven one (Reese, 2007). In terms of the company's factors for success, the greater opportunities is to move into
Information Technology holds great promise for improving the way a government serves its citizens in various services it conducts to the citizens. This rapid adoption of information technology has produced substantial benefits to the citizens, tax payers, and businesses alike. It is therefore recommended for every particular government to develop digital services to streamline all its operations. One area where governments should enhance its key functions is the establishment of
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now