1

PWU
Term 2 SY 2022-2023
C. Gonzaga

BSAC 346 INFO SYSTEMS AUDIT

SEATWORK 2
TOPIC: COMPUTER FRAUD, ETHICS, AND INTERNAL CONTROL
Due Date : Dec. 2, 2022 (Friday) at 11:59 PM
INFORMATION SYSTEMS AUDIT
EXER 1: Computer Fraud, Ethics, and Internal Control
SURNAME: KIM FIRST NAME: Stephanie Jean M.I. R

1. Create a pie chart using the MS Excel for each of the following:
a. Computer fraud classification

b. Interest harmed (breach of integrity, availability or confidentiality)

 2

c. Perpetrators/ fraudsters

d. Target victims

2. Frauds or irregularities usually occur because of available opportunities such as poor internal control
system. Give examples of common weaknesses in internal control system or IT security failures that
more likely lead to security breaches.

3. Referring to Number 5, if you were an Information System Auditor, what recommendations would you
make to prevent the occurrence of frauds and irregularities?

SUGGESTED FORMAT:

Internal Control Weaknesses

1. Technical Internal Control Weakness
- Weaknesses in a technical control are due to technological and maintenance changes or
configuration failures. If the hardware or software of a corporate information system is breached,
this is called a technical weakness.
2. Operational Internal Control Weakness
- Weaknesses in operational controls are due to human factors. Operational controls become less
effective if the employees responsible for operations do not follow established standards and
policies.
3. Administrative Internal Control Weakness
 3

- Weaknesses in administrative security controls also called procedural controls, result from a
failure to consistently comply with established standards and regulations.

Recommended Preventive Controls

1. Catalog Internal Control Procedures
- This includes financial transaction documentation, procurement processes, product design
projects, product testing, and internal audits. Determine which parts of the company are at a
higher risk than others. Evaluate your control designs including documentation, training,
segregation of duties, and feedback loops.
2. Conduct a Risk Assessment
- All internal control procedures must undergo a risk assessment. Identify which failures are most
likely to affect your company. Risk assessment is usually done in tabular form with risks arranged
in rows and columns representing a log of the problem and solution.
3. Train and Educate Staff
- As internal controls continue to evolve, it is important to educate employees on the latest internal
control procedures and methods. Notify employees of any changes and their impact on their daily
routines. Lack of employee knowledge and training is one of the leading causes of internal control
failure. By training employees, and involving them in the process, they can help you identify and
rectify control weaknesses.

References:
https://pathlock.com/learn/4-types-of-internal-controls-weaknesses-and-5-ways-to-fix-them/
https://reciprocity.com/how-to-identify-internal-control-weaknesses/
https://cpahalltalk.com/internal-control-weakness/