Question

I need an introduction to computer fraud and how it happens in the accounting environment

Answer 1

Computer fraud can be described as a way of stealing or misusing someone else’s electronic data and using it for own benefit. It is done using computers, the Internet and other electronic devices.

Types of computer fraud:-

1.       Hacking into computer systems to access financial information like credit card details.

2.       Circulating computer viruses to destroy or malfunction another’s computer.

3.       Distribution of hoax mails.

4.       Phishing.

5.       Unauthorized access of computers.

6.       Farming- Redirecting the genuine website traffic to fraudsters website.

Computer fraud in accounting environment: -

1.       Nowadays, data is stored in cloud environment. This led to increase in hacking such data storage facilities to gain critical financial data about the organization and distributing it to their competitors.

2.       While performing online banking transaction there can are chances of sharing passwords accidently which in turn can led to hacking of the company’s card.

1. Sales Skimming: -In this fraud, when sales are done, receipts are not recorded in the books of accounts. And the amounts received is taken by the employee for his personal use. This is generally done with one-time customers by issuing fake receipt.
2. In computerized accounting, employees can manipulate data more easily as compared to physical accounting books because altering them is next to impossible.

To conclude, although there are some demerits of using computerized accounting but demerits can be controlled by using proper security measures and timely audits of systems.