Threats to Accounting Information Systems

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Table 5-1 from Accounting Information Systems, 12th Edition

Threats to Accounting Information Systems

1) Natural and Political Disasters
2) Software Errors and Equipment Malfunctions
3) Unintentional Acts
4) Intentional Acts (Computer Crimes)

Natural and Political Disasters

Fire or excessive heat, Floods, Earthquakes and landslides, Hurricanes, tornadoes and high winds, Blizzards, snowstorms, and freezing rain, war and attacks by terrorists.

Software Errors and Equipment Malfunctions

Hardware or software failures, Software errors or bugs,
Operating system crashes, Power outages and fluctuations, undetected data transmission errors

Unintentional Acts

accidents caused by human carelessness, failure to follow established procedures, and poorly trained or supervised personnel, innocent errors or omissions, lost, erroneous, destroyed, or misplaced data, logic errors, systems that do not meet company needs or are incapable of handling their intended tasks.

Intentional Acts

Sabotage, which is destroying a system, computer fraud, misappropriation of assets, financial statement fraud, corruption

Four Actions the Treadway Commission Recommends to Reduce Fraudulent Financial Reporting

1) Establish an organizational environment that contributes to the integrity of the financial reporting process
2) Identify and understand the factors that lead to fraudulent financial reporting
3) Assess the risk of fraudulent financial reporting within the company
4) Design and implement internal controls to provide reasonable assurance of preventing fraudulent financial reporting

SAS No. 99 requires auditors to:

1) Understand fraud
2) Discuss the risks of material fraudulent misstatements
3) Obtain information
4) Identify, assess, and respond to risks
5) Document and communicate findings
6) Incorporate a technology focus

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