Accounting Information Systems: The Processes and Controls, 2nd Edition

THE NATURE OF COMPUTER FRAUD (STUDY OBJECTIVE 7)

In addition to the frauds described in previous sections, organizations must also attempt to prevent or detect fraudulent activities involving the computer. Again, there are so many different kinds of computer fraud that it is not feasible to describe all the possibilities in this chapter. In some cases, the computer is used as a tool to more quickly and efficiently conduct a fraud that could be conducted without a computer. For example, an individual could perpetrate industrial espionage, the theft of proprietary company information, by digging through the trash of the intended target company. However, it would probably be more efficient for a hacker to gain access to the information through the target company's computer system. In other cases, the fraud conducted is unique to computers. For example, a computer is required to accomplish software piracy, the unlawful copying of software programs.

Another characteristic of computer fraud is that it can be conducted by employees within the organization or unauthorized users outside the organization. We categorize these two sources of computer fraud into internal computer fraud and external computer fraud.

INTERNAL SOURCES OF COMPUTER FRAUD

When an employee of an organization attempts to conduct fraud through the misuse of a computer-based system, it is called internal computer fraud. Internal computer fraud concerns each of the following activities:

1. Input manipulation
2. Program manipulation ...