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17 Cards in this Set

  • Front
  • Back
Computer Crimes – Define
All types of defalsifications (embezzlements) accomplished by tampering with computers hardware and software.
Can be equipment, programs, operations, data files
Computer Crime - Incentives
Large intake per crime
Detection difficulties
Lengthy and costly prosecution procedures
Doubtful prosecution outcome
Weak punishment
Major causes of financial crimes
Lack of ethics
Social and political problems
Inadequacy of accounting & auditing education and training
Managerial incompetence
Connections with organized crime
Major types of controls
-Public Source
-Governmental Source
-Private Source

Internal Controls
External Controls
Overall Controls
Major types – Detection of Financial Crimes
Personal techniques
Organizational techniques
Computer (EDP) techniques
Fraud investigations
Financial statements analysis
Detection of Financial Crimes – Personal techniques
Criminal record
Living beyond personal financial means
Involvement in unaffordable investments
Shifty eyes
High personal debts
Extensive gambling
Excessive use of alcohol and drugs
Personal problems
Too close association with consumers, suppliers, and financiers
Extensive overtime
Skipping vacations
Excessive sick leaves
Questionable background
Unjustifiable attempts to change the operating systems
Regular borrowing from fellow employees
Detection of Financial Crimes – Organizational techniques
-Insufficient working capital
-High turnover in financial positions
-Constant change of external auditors
-Unjustifiable use of sole-suppliers
-Excessive traveling costs
-Unjustifiable transfers of funds between affiliated companies or divisions
-Excessive payment of consulting and legal fees
reported conflits of interest
continuous centralization of management controls
collection difficulties
unjustified number of bank accounts
late reports
violation of operating policies, rules, and regs
suspended accounts
Detection of Financial Crimes – Organizational techniques
Financial Crimes Prevention Techniques (Exam) (10)
-Efficient Personnel Management Practice
-Proper financial planning and control
-Selection of honest and competent senior executives
-Implementation of adequate cost accounting systems
-Implementation of integral internal audits
-Hiring competent internal and external auditors
-Proper coordination between the internal and external auditors
-Periodic review of policies, plans, programs, and procedures
-Implementation of integral security and investigation systems
-Utilization of the professional services of independent consultants.
Internal operational auditing of non-profit organizations – Strategic areas
Operating goals
Financial management
Accounting records
Accounting practice
General managerial skills and achievements
Major types of governmental organizations
Executive Organizations
-White House
-Federal Depts, agencies, projects
Legislative Organizations
Judiciary Organizations
-Supreme Courts
-Federal courts

Executive Organizations
-State Depts, agencies, projects
Legislative Organizations
-States Congress
Judiciary Organizations
-States Courts
Governmental & Private Organizations Contrasted
-Governmental has Exec., Leg., and Jud. Branches which Private just has Board of Dir.
-Services for Citizens vs. Stockholders
Major types of Governmental Audits
Financial and compliance audits
Efficiency and economy audits
Program results audits
Management audits
Define Financial and Compliance Audits
Conducted by federal agencies that aim to
evaluate the compliance of accounting, auditing and managerial practices
with the requirements of professional standards and relevant laws, rules, and regulations
Define efficiency and economy audits
Conducted by federal agencies that aim to
evaluate the operational efficiency of American corporations and governmental agencies.
Define program results audits
Operational audits conducted by the general accounting office that aim to measure the attainment of federal programs goals and to report on related findings and recommendations.
Define management audits
Audits conducted by concerned federal agencies that aim to evaluate the performance efficiency of corporate and governmental executives.
New trends in governmental auditing
Utilization of advanced auditing techniques
Reliance on other auditors
Enforcing multiple reporting levels
Implementing on-line auditing
Increased responsibility for timely corrective actions
Training and professionalism