ASSINGNMENT II OF ACCOUNTING INFORMATION SYSTEM II

ICP CLASS GROUP II

“COMPUTER FRAUD”
(MARSHALL ROMNEY, CH 5 + CH 6)
- ADRIAN CAESAR PRABOWO ( 1411000267 )
- DEVY TIUR NAOMI ( 1411000412 )
- PRYANKA ICHSAN HADI ( 1411000283 )
- SARAH SAUSAN SUYONOPUTRI ( 1411000262 )
- YETI NURZAIROH ( 1411000184 )
 Why we have to learn about Computer Fraud?

1. The impact of computer fraud and abuse techniques will influence the business process in the company,
for example, unauthorized theft, use, use, access, modification, copying, or destruction of software,
hardware, and/or data.

2. Computer fraud can be much more difficult to detect than other types of fraud.

3. Some organizations grant employees, customers, and suppliers access to their systems, therefore it will
increase computer fraud risk.

4. Distributed computer networks make data available to many users, and these networks are harder to
control than centralized mainframe systems.
 Who involved in Computer Fraud and Abuse Techniques?

Internal

Top Management Middle Management

Lower Management Operational Staff

The person who possess
more computer experience
External and skills.

Customers Suppliers

Other external parties related to business process

When does Computer Fraud occur?

1. Pressure, person’s inventive or motivation for committing fraud.

2. Opportunity, the condition including personal’s abilities that allows to:

• Commit fraud,
• Conceal the fraud,
• Convert the theft or misrepresentation to personal gain.

3. Rationalization, the condition which allows the person to justify their

fraud.
 Where does Computer Fraud occur?

Companies that use computer system to operate their business

process.
 How is The Mechanism of Computer Fraud?

1. Theft of a valuable 1.The Perpetrators ( employee ) steal/theft the company valuable assets
asset such as cash, inventory & equipment
2. The Perpetrators convert the asset they have stolen by sell the assets or
convert them into cash. In cases of falsified financial statement,
perpetrators convert their actions to personal gain through indirect benefits;
that is, they keep their jobs, their stock rises, they receive pay raises and
2. Conversion of assets promotions, or they gain power and influence.
into cash/ 3.The Perpetrators cover their crime with manipulation such manipulating
mispresentation to accounting records, etc.
personal gain

3. Covering crime with

manipulation
 How to prevent Computer Fraud?

To make fraud difficult to commit

1. Develop and implement a strong system of internal controls,

2. Segregate the accounting functions of authorization, recording, and custody,

3. Implement a proper segregation of duties between systems functions,

4. Safeguard all assets, record, and data,

5. Require independent checks on performance, such as reconciliation of two independent sets of records, where
practical,

6. Encrypt stored and transmitted data and programs to protect them from unauthorized access and use,

7. Implement computer-based controls over data input, computer processing, data storage, data transmission, and
information output.
 How to prevent Computer Fraud?

To make fraud less likely to occur:

1. Increase the penalty for committing fraud by prosecuting fraud perpetrators more vigorously,

2. Create an organizational culture that stresses integrity and commitment to ethical value and competence,

3. Adopt an organizational culture, management philosophy, operating style, and risk appetite that minimize the
likelihood of fraud,

4. Train employees in integrity and ethical considerations, as well as security and fraud prevention measures,

5. Identify the events that lead to increased fraud risk, and take steps to prevent, avoid, share, or accept that risk,

6. Effectively supervise employees, including monitoring their performance ad correcting their errors,
 What is Computer Fraud ?

Computer Fraud is any fraud that requires computer technology to perpetrate it. Examples Include :
• Unauthorized theft, use, access, modification, copying, or destruction of software, hardware, or data
• Theft of assets covered up by altering computer records
• Obtaining information or tangible property illegally using computers
Types of Computer Fraud

Input Fraud, altering or falsifying computer input.

Processor Fraud, includes unauthorized system use,

including the theft of computer time & services.

Computer Instructions Fraud, includes tampering with

company software, copying software illegally, using
software in authorized manner.

Data Fraud, illegally using, copying, browsing,

searching, or harming company data constitutes data
fraud.

Output Fraud, Unless properly safeguarded, displayed or

printed output can be stolen, copied, or misused.
 What lesson we can learn from from Computer Fraud?

1. Computer Fraud only occur in the companies that using computer systems in their business process,

2. Computer Fraud is more likely done by person who have more computer experience and skills,

3. Computer Fraud is hard to detect, because lack of internal controls,

4. Computer Fraud occur when perpetrators have the situation of Fraud Triangle (Pressure, Opportunities,
and Rationalization),

5. Companies have to prevent and detect computer fraud by make fraud less to occur, increase the
difficulty of committing fraud, improve detection method, and reduce fraud losses in order to make the
business process runs well.
 Sources

Romney, Marshall B., Steinbart, Paul John. (2015). Accounting Information Systems (Global Edition) (13th). Harlow,
England: Pearson Education Limited.

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