Lecture Nots

Learning Objectives:

1. Explain the threats faced by modern information systems.

2. Define fraud and describe both the different types of fraud and the process one follows to perpetuate a fraud.

3. Discuss who perpetrates fraud and why it occurs, including the pressures, opportunities, and rationalizations that are present in most frauds.

4. Define computer fraud and discuss the different computer fraud classifications.

5. Explain how to prevent and detect computer fraud and abuse.

Jason anticipated the following questions that management was going to ask:

1. What constitutes a fraud, and is the withholding problem a fraud?

2. How was the fraud perpetrated? What motivated Don to commit it?

3. Why did the company not catch these mistakes? Was there a breakdown in controls?

4. How can the company detect and prevent fraud?

5. How vulnerable is the company’s computer system to fraud?

Introduction

Our society has become increasingly dependent on accounting information systems.

As system complexity and our dependence on systems increase, companies face the growing risk of their systems being compromised.

A recent survey disclosed that

1. 67 percent of companies had a security breach

2. More than 45 percent were targeted by organized crime

3. 60 percent reported financial losses

The four types of threats to an AIS a company faces are explained in Table 5-1 on page 123.

Learning Objective One

Explain the threats faced by modern information systems.

Learning Objective One

Explain the threats faced by modern information systems.

AIS Threats

Four Types of Systems Threats:

1. Natural and political disasters

2. Software errors and equipment malfunctions

3. Unintentional acts

4. Intentional acts (computer crimes)

1. Natural and political disasters

Fires, excessive heat, floods, earthquakes, high winds, war, and attacks by terrorists

* World Trade Center in New York...