Question

Assignment Question(s):​​​​​​

1. 1. Write in your own words what is fraud as per Accounting Information System. Explain Fraud triangle as per Accounting Information Systems. ( 1 Marks)

2. Explain how can AIS add value to the organization? (1 Mark)

3. What are the components of the accounting information system and what is the role of each components in making the system successful? (1 Mark)

4. Choose one of the social Engineering Techniques and write a scenario how it could be used to manipulate others?

Answer 1

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Answer:

Preface: In the rapidly growing industrial environment, fraud is in everywhere. It is hardly impossible to pick a newspaper without seeing evidence of fraud, embezzlement and hacking. Fraud is an ever present, growing and increasingly dangerous threat to both business and the financial service profession.

However, the government taken several steps to prevent these type of frauds and Accounting Information System is one of them to prevent the same fraud.

1. As per Accounting Information System, fraudulent behaviour among AIS users is a perpetual accounting and auditing concern. Financial fraud is an activity that can affect more than one person or company and it may have indirect effects on external entities. Employees that are authorised users to AIS may have the oppertunity to misappropriate AIS data and information.

The fraud triangle is a model for explaining the factors that are cause someone to commit occupational fraud. It consist of three components which together lead to fraudulent behavior:

(i) Perceived unshareable financial data;

(ii) Perceived oppertunity;

   (iii) Rationalisation.

2. A primary purpose of AIS is to serve a systematic and comprehensive system that records and reports financial transaction, which are integral to business operations. Reporting can be defined as the process of analysing and summarising the organisation's transactions in order to provide information that is utilised in decision making.

3. There are five components of AIS is as follows:

   (i) Ethics Education: Organisation that are truly concerned with ethical behaviour on the part of employee and fraud deterrence should begin by hiring graduates colleges and universities with a track record of producing ethically inclined students.

(ii): Ethics Focused Onboarding and Training: Ethics policies and guidelines should be in place in organisations to provide guidance to newly hired workers and accounting employees.

   (iii): Information and Data Controls: Encryption is a process that data from its original to a scramble form. Data in AIS database can be stored in encrypted. It will be difficult or impossible to understand.

(iv): Real-time Reporting Impacts on Company: Real-time reporting capabilities for AIS offer organisations many benefits in comparison to the traditional periodic reporting.

(v): Real-time Database Monitoring: Real-time database monitoring allows management to quickly identify who or what is responsible for transactions and changes AIS data.

4. Example of Social Engineering Techniques to manipulate others: An accounting employee with authorised access to the AIS database may be able to alter payroll, billing, or reimbursement data for personal gain. Fraudulent behavior by accounting employees can also involve the intentional manipulation of the content or the structure of financial reports.

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