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15 Cards in this Set
- Front
- Back
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Natural and political disaster threat
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Fire or excessive heat. Floods, earthquakes, landslides, hurricanes, tornadoes, blizzards, snowstorms, and freezing rain. War and attacks by terrorists.
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Software errors and equipment malfunctions
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Hardware or software failure. Software errors or bugs. Operating system crashes. Power outages and fluctuations. Undetected data transmission errors.
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Unintentional acts
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Accidents caused by human carelessness, failure to follow established procedures, and poorly trained or supervised personnel. Innocent errors or omissions. Lost, erroneous, destroyed, or misplaced data. Logic errors. Systems that do not meet company needs or cannot handle intended tasks.
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Intentional acts (computer crimes)
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Sabotage. Misrepresentation, false use, or unauthorized disclosure of data. Misappropriation of assets, Financial statement fraud. Corruption. Computer fraud - attacks, social engineering, malware, etc.
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Misappropriation of assets
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The theft of company assets
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Fraudulent financial reporting
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Intentional or reckless conduct, whether by act or omission, that results in materially misleading financial statements. Financial statements are falsified to deceive investors and creditors, increase a company's stock price, meet cash flow needs, or hide company losses and problems.
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Who commits fraud?
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Anyone can commit fraud, studies find little differences between those who commit fraud and the public. Every perpetrator has their own reason to commit fraud.
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The Fraud Triangle.
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The Fraud Triangle consists of Pressure, Opportunity, and Rationalization. Common pressures are Financial (Not being able to pay debts), Emotional (Fear of loss of status), and Lifestyle (Gambling). Opportunity may present itself with the ability to commit the fraud, conceal the fraud, and convert the proceeds (This is due in part to poor internal controls). Rationalization occurs when the perpetrator can justify their illegal behavior through gross rationalizations.
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Lapping
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Concealing theft by a series of delays in posting collections to accounts. For example, steal A/R from customer A, then pay off with funds received later from customer B, then use funds from customer C to pay off customer B's balance, etc.
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Kiting
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Continually making deposits of money from one bank account to another while withdrawing the funds before they're processed and truly deposited in order to "create" money.
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Expensing
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Offsetting an item of normal expenditure as an expense against taxable income, even though it shouldn't be classified as such.
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Processor Fraud
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Involves unauthorized system use. Includes theft of computer time and services.
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Computer Instructions Fraud
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Involves tampering with software that processes company data. May Include: Modifying the software. Making illegal copies. Using it in an unauthorized manner.
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Data Fraud
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Involves altering or damaging a company's data files; or copying, using, or searching the data files without authorization. Sale of stolen data.
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Output Fraud
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Stealing or misusing system output. Use computers and peripheral devices to create counterfeit outputs.
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