general model for accounting information systems by hall

General Model for Accounting Information Systems

Oleh : Bambang Setiawan, S.Kom

01/05/2023Information System UIN Suska Riau

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Data Collection and Data Processing

•Data collection frauds involve entering falsified data into the system by deleting, altering or creating a transaction.•Masquerading involves gaining remote access by pretending to be an authorized user. Piggybacking involves latching onto an authorized user in the system. Hacking involves both schemes motivated by the challenge of trying to access the system.

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• Data processing: A series of actions or steps performed on data to verify, organize, transform, integrate, and extract data in an appropriate output form for subsequent use. Methods of processing must be rigorously documented to ensure the utility and integrity of the data.• Data processing frauds are in two classes:• Program fraud includes creating illegal programs or

destroying, corrupting or altering computer logic to cause data to be processed incorrectly.• Operations fraud is misuse or theft of computer resources.

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5Database Management and

Information Generation

Database management fraud involves altering, deleting, corrupting, destroying, or stealing an organization’s data. Often associated with transaction or program fraud and

disgruntled employees who may copy, sell or destroy data.


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Information generation fraud involves stealing, misdirecting or misusing computer output. Useful information has: relevance, timeliness,

accuracy, completeness and summarization. Scavenging involves searching for discarded output. Eavesdropping involves listening to output

transmissions over telecommunication lines.


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Auditor’s Responsibility for Detecting Fraud

• Description and characteristics of fraud• Professional skepticism• Engagement personnel discussion• Obtaining audit evidence and information• Identifying risks• Assessing the identified risks

• Responding to the assessment• Evaluating audit evidence and

information• Communicating possible fraud• Documenting consideration of

fraud

o Auditor also required to assess risk factors related to fraudulent financial reporting and misappropriation of assets.


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Fraudulent Financial Reporting

Risk factors: Management’s characteristics and influence

over the control environment, industry conditions and operating characteristics and financial stability.

Common schemes: Improper revenue recognition or treatment

of sales. Improper asset valuation or deferral of

costs and expenses. Improper recording of liabilities. Inadequate disclosures.


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Misappropriation of Assets

Risk factors:Susceptibility of assets to misappropriation and

controls.Common schemes:

Personal purchases or ghost employees.Fictitious expenses or altered payee.Pass-through vendors.Theft of cash (or inventory).Lapping.


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Auditor’s Response to Risk Assessment

Judgments about the risk of material misstatements may affect the audit in regards to:Engagement staffing, extent of supervision,

professional skepticism, nature, timing, extent of procedures performed.

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Risk of material misstatement due to fraud always exists. Auditor:may determine currently planned audit

procedures are sufficient to respond to risk factors.

may determine to extend audit and modify planned procedures.

may conclude procedures cannot be modified sufficiently to address risk and consider withdrawing.

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Information System UIN Suska Riau


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Auditor’s Response to Detected Misstatements Due to Fraud

Auditors will enter a much expanded arena of procedures to detect fraud as they implement SAS no. 99. The new standard aims to have the auditor’s consideration of fraud seamlessly blended into the audit process and continually updated until the audit’s completion. SAS no. 99 describes a process in which the auditor 1) gathers information needed to identify risks of material

misstatement due to fraud, 2) assesses these risks after taking into account an evaluation

of the entity’s programs and controls and 3) responds to the results. Under SAS no. 99, you will gather

and consider much more information to assess fraud risks than you have in the past


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If no material effect: Refer matter to management and ensure implications to other aspects of audit have been addressed.

If effect is material or undeterminable:Consider implications for other aspects of the

audit.Discuss with senior management and audit

committee.Attempt to determine if material effect.Suggest client consult with legal counsel.


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Working papers document criteria used for assessing fraud risk: Where risk factors are identified,

documentation should include. those risk factors identified andauditor’s response to them.

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Fraud Detection Techniques Using ACL

Payroll fraud:Use expression builder to test for excessive

hours worked.Use duplicate function to test for duplicate

payments.Use join function to link payroll and

employee files to test for non-existent employees.


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Lapping Accounts Receivable:Use expression builder to locate and

investigate invoices whose Remittance Amount is less than the Invoice Amount.

Calculate the amounts carried forward and use the duplicates command to search for carry-forward amounts that are the same.


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Finish

general model for accounting information systems by hall

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