Term
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Definition
| apply overall to the accounting system; they are not restricted to any particular accounting application |
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Term
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Definition
| intended to ensure that inputs and processing are accurate and complete and that outputs are properly distributed, controlled and disposed. |
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Definition
| careful and responsible oversight and use of assets entrusted to management |
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Definition
| help fulfill managements obligation to maintain accurate and complete accounting systems and protect assets |
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Term
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Definition
| theft, concealment, and conversion to person gain of another's money, physical assets, or information |
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Term
| Misappropriation of assets |
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Definition
| theft of any item of value. Also referred to as Defalcation or Internal Theft |
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Term
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Definition
| theft of any item of value. Also referred to as Misappropriation of funds or Internal Theft |
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Term
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Definition
| theft of any item of value. Also referred to as Misappropriation of funds or Defalcation |
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Term
| Misstatement of financial records |
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Definition
| Falsification of accounting reports. AKA: Earnings Management or Fraudulent financial Reporting |
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Term
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Definition
| consists of three parts: Incentive, Opportunity, and Rationalization |
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Term
| Incentive (Fraud Triangle) |
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Definition
| financial pressures, market pressures, job related failures, or addictive behaviors may create incentive |
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Term
| Opportunity (Fraud Triangle) |
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Definition
| circumstances may provide access to the assets or records that are the objects of fraudulent activity |
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Term
| Rationalization (Fraud Triangle) |
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Definition
| fraudsters typically justify their actions because of lack of moral character |
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Term
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Definition
| conducted by one or more top-level managers within the company |
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Term
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Definition
| involves top management's circumvention of the system or internal controls that are in place |
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Term
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Definition
| Employee steals cash or assets for personal gain. Examples: Inventory Theft, Cash Receipts Theft, Accounts Payable Fraud, Payroll Fraud, Expense Account Fraud |
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Term
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Definition
| cash payment that a vendor gives the employee in exchange for the sale |
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Term
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Definition
| stealing an organization's cash before it is entered into the accounting records |
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Term
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Definition
| stealing an organization's cash after it is entered into the accounts receivable records |
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Term
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Definition
| Two or more people work together to commit fraud |
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Term
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Definition
| customer improperly obtains cash or property from a company, or avoids a liability through deception |
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Term
| Credit Card Fraud or Check Fraud |
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Definition
| Customer's use of stolen or fraudulent credit cards or checks |
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Term
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Definition
| Customer tries to return stolen good to collect a cash refund |
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Term
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Definition
| occurs when vendors obtain payments to which they are not entitled |
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Term
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Definition
| examination of vendor records in support of amounts charged to the company |
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Term
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Definition
| theft of proprietary information by digging through the trash of the intended target company |
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Term
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Definition
| unlawful copying of software programs |
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Term
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Definition
| alteration of a program to slice a small amount from several accounts and then credit those small amounts to the perpetrator's benefit |
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Term
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Definition
| unauthorized program within a larger, legitimate program, used to manipulate the computer system to conduct fraud |
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Term
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Definition
| valid programming tool that is misused to commit fraud. Programmers use trap doors to enter the program. They should be removed before the program is used |
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Term
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Definition
| term commonly used for computer network break ins |
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Term
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Definition
| Is intended to overwhelm an intended target computer system with so much bogus network traffic that the system is unable to respond to valid network traffic |
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Term
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Definition
| Occurs when a person, through a computer system, pretends to be someone else. |
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Term
| Sarbanes-Oxley Act of 2002 |
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Definition
| The Act was intended to reform accounting, financial reporting, and auditing functions of companies that are publicly traded in stock exchanges |
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Term
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Definition
| Designed to avoid errors, fraud, or events not authorized by management. Intended to stop undesirable acts before they occur. |
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Term
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Definition
| Must be included in an internal control system. Help employees to uncover or discover errors, fraud, or unauthorized events. |
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Term
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Definition
| Those steps undertaken to correct an error or problem uncovered via detective controls. |
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Term
| Committee of Sponsoring Organizations (COSO) |
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Definition
| Due to ongoing problems with fraudulent financial reporting, this organization undertook a comprehensive study of internal control and in 1992 issued the COSO report. |
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Term
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Definition
| Has become the standard definition and description of internal control accepted by the accounting industry. |
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Term
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Definition
| Sets the tone of an organization and influences the control consciousness of its employees. It is the foundation for all other components of internal control. |
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Term
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Definition
| Existing threats and the potential for additional risks are assessed and management stands ready to respond should these events occur. |
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Term
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Definition
| The policies and procedures that help ensure that management directives are carried out and that management objectives are achieved. |
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Term
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Definition
| Refers to an approval, or endorsement, from a responsible person or department in the organization that has been sanctioned by top management. |
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Term
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Definition
| A set of guidelines that allows transactions to be completed as long as they fall within established parameters. |
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Term
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Definition
| Explicit authorization is needed for that single transaction to be completed. |
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Term
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Definition
| For any transaction, there are usually 3 parts: authorization of the transaction, recording, and custody of the related assets. |
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Term
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Definition
| Lessens the risk of negative effects when other controls are lacking. |
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Term
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Definition
| Presents verifiable information about the accuracy of accounting records. |
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Term
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Definition
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Term
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Definition
| Serve as a method to confirm the accuracy and completeness of data in the accounting system. |
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Term
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Definition
| Procedure that compares records from different sources. |
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Term
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Definition
| A summation of key items in the batch. |
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Term
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Definition
| The ongoing review and evaluation of the system. |
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Term
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Definition
| The controls achieve a sensible balance of reducing risk when compared with the cost of the control. |
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