Ais 560 Ch 5

Front 1

what are the four types of threats a company faces

Back 1

natural and political disasters; software errors and equipment malfunctions; unintentional acts; intentional acts

Front 2

for an act to be considered fraudulent there must be

Back 2

a false statement, a material fact, an intent to deceive, a justifiable reliance, and an injury or loss

Front 3

what is the theft of assets committed by a person or group of people for personal financial gain

Back 3

misappropriation of assets

Front 4

the intentional or reckless conduct that results in materially misleading financial statements

Back 4

fraudulent financial reporting

Front 5

what four actions are recommended to reduce the possibility of fraudulent financial reporting

Back 5

establish an environment that contributes to the integrity of the reporting process, identify and understand the factors that lead to fraudulent reporting, assess the risk of fraudulent reporting within the company, design and implement internal controls

Front 6

SAS no 99 requires auditors to

Back 6

understand fraud, discuss the risks of material fraudulent misstatements, obtain information, identify and respond to risks, evaluate the results of audit tests, document findings, incorporate a technology focus

Front 7

three conditions are necessary for fraud to occur

Back 7

pressure, opportunity, and rationalization

Front 8

a person's incentive or motivation for committing the fraud

Back 8

pressure, opportunity, and rationalization

Front 9

what types of pressure are there

Back 9

financial, emotional, lifestyle

Front 10

opportunity allows a person to do three things

Back 10

commit the fraud, conceal the fraud, and the opportunity to convert the theft or misrepresentation to personal gain

Front 11

when the perpetrator covers up a theft by creating cash through the transfer of money between banks

Back 11

kiting

Front 12

when the perpetrator steals the cash or check that customer A mails in to pay its accounts receivable, and then allocates payment from customer B to pay A's AR, and so on

Back 12

lapping

Front 13

what are some of the internal control factors that would provide opportunity to commit and conceal fraud

Back 13

failure to enforce internal controls, management not involved in controls, management override of controls, management inattention to details, unchallenged management, no effective internal auditing staff, infrequent third party reviews, inadequate documents, no audit trails, failure to conduct background checks

Front 14

what are some of the "non internal" control factors that would provide opportunity to commit and conceal fraud

Back 14

complex transactions, numerous adjusting entries, related party transactions, understaffed accounting department, rapid turnover of key employees, lengthy tenure in a key job, mo code of conduct, operating on a crisis basis, pushing accounting principles to the limit, failure to prosecute dishonest employees

Front 15

any illegal act for which knowledge of computer technology is essential for its perpetration

Back 15

computer fraud

Front 16

computer fraud includes

Back 16

unauthorized theft of software or data, theft of money by altering computer records, theft of computer hardware, use of computer resources to commit a felony, intent to illegally obtain information or tangible property through the use of computers

Front 17

estimates are that between __ and ___ % of all computer crimes are detected

Back 17

5 and 20

Front 18

an estimated ___ of uncovered computer frauds are not reported

Back 18

80-90%

Front 19

the theft of information and intellectual property

Back 19

economic espionage

Front 20

using the data processing model, how would you classify computer fraud

Back 20

input, output, processor, computer instructions, and stored data

Front 21

the changing of data before during or after it is entered into the system

Back 21

data diddling

Front 22

using software to collect web surfing and spending data

Back 22

adware

Front 23

copying company data without permission

Back 23

data leakage

Front 24

sending e-mail bombs from randomly generated false addresses

Back 24

denial of service attack

Front 25

using special software to guess company addresses and send them blank e-mail addresses, and then add the addresses of unreturned e-mail to spam lists

Back 25

dictionary attack

Front 26

using a computer system without permission

Back 26

hacking

Front 27

gaining control of someone else's computer to carry out illicit activities

Back 27

hijacking

Front 28

using spyware to record keystrokes

Back 28

key logger

Front 29

sabotaging a system using a program that lies idle until some specified time or circumstance

Back 29

logic time bomb

Front 30

using a computer to find user names and passwords as they travel through networks

Back 30

packet sniffing

Front 31

sending e-mails to people requesting them to fill in personal details on fake websites

Back 31

phishing

Front 32

attacking phone systems and using phone lines to transmit viruses and destroy data

Back 32

phreaking

Front 33

tapping into telecommunications line and latching onto a legitimate user before they log in

Back 33

piggybacking

Front 34

stealing tiny slices of money over a period of time,

Back 34

salami technique

Front 35

searching corporate resources from trashcans or printouts or computer memory

Back 35

dumpster diving

Front 36

watching people enter credit card numbers, or listen as they give them to a clerk

Back 36

shoulder surfing

Front 37

tricking an employee into providing the information needed to get into a system

Back 37

social engineering

Front 38

making an email message appear to be from someone else

Back 38

spoofing

Front 39

how can you reduce fraud losses

Back 39

maintain adequate insurance, develop comprehensive fraud contingency, disaster recovery and continuity plans, store backup copes of program and data files in a secure off site location, use software to monitor system activity