AIS Chapter 3: Cybercrime, Fraud, and Ethics

most computer criminals: a. have non technical backgrounds b. have noncriminal backgrounds c. have little college education d. are young and bright e. have probably not been caught, so we don't really know much about them

E

which of these is a software tool often used by forensic accountants? a. MS-DOS b. ACFE c. computer spy d. logic bomb e. EnCase

E

fraudulent financial reporting

intentional falsification of accounting records

other names for ethical hacking

intrusion testing, penetration testing, and red teaming

integrated computer assisted surveillance system (ICASS)

is a customer-driven, voluntary interagency system for managing and funding administrative support services abroad

Denial or service (DOS)

is any type of attack where the attackers (hackers) attempt to prevent legitimate users from accessing the service

is engaging in non working activities using the internet at work considered a cyber crime?

it can be because you are using the companies time and money

why is hacking such a widespread problem?

many computer applications now involve cloud, local, and wide area networks

misappropriation of assets

misuse of company assets

ethical hackers

organizations hire these people to test their vulnerability to hacking

logic bomb

programs similar to trojan horse program, except that they remain dormant until the computer system encounters a specific condition

encryption protection

protects transmitted data that might be intercepted en route and also stored data, which are rendered useless to a hacker even if he/she manages to gain access to files that are protected by other means - it's an algorithm, series of keys that are being used to unlock what had been encrypted on the other end (have to have that key in order to decrypt it)

encryption

protects transmitted data that much be intercepted en route and also stored data

computer fraud

refers specifically to the use of computers or network to commit a fraudulent act (specific form of cybercrime)

identify theft

refers to an act in which someone wrongfully obtains and uses another persons personal data for fraud or deception

data diddling

refers to changing data before, during, or after they are entered into a computer system change can delete, alter, or add important system data, especially the data stored in corporate databases

worms

replicate themselves repeatedly like a virus but can consume internal memory, disk space, and internal bandwidth (worms are animals, can consume)

trojan horse programs

reside in disk space occupied by legitimate copies of computer program (e.g., Excel) and then release a bomb

RITE

responsibility, integrity of the individual, trustworthiness, ethical

opportunity for fraud

results from lack of controls

smishing

similar scam to phishing except it uses text messages on cell phones

applet

small program stored in a web page file and designed to run by web browser software

computer abuse

someone who does not have permission, uses or accesses someone else's computer or causes damage without intention to harm

misappropriation of assets involves

stealing assets from a company and is usually committed by employees within an organization or through collusion of employees and outside conspirators (occupational fraud)

dumpster diving

stealing personal information from garbage cans, taking delivered or outgoing mail from house mail boxes, or making phone solicitations that ask for personal info

CIA

the principals behind COBIT 1. confidentiality 2. Integrity 3. availability

computer fraud and abuse act of 1986 (CFAA)

defines cybercrime as any illegal act for which knowledge of computer technology is essential for perpetration, investigation, or prosecution

boot-sector viruses

hide in the boot sectors of a disk, where the operating system access them every time it accesses the disk itself (when you re-boot machine)

rationalization for fraud

how the individual internalizes it (i deserve this, they deserve this)

5 antivirus control procedures

1. buying software from reputable sources 2. avoiding illegal software copying 3. not downloading suspicious files from the internet 4. deleting email messages from unknown sources before opening them 5. maintaining complete backup files in the event you must rebuild your system

examples of cybercrime

1. compromising valuable information 2. hacking 3. denial of service

The TRW Credit Data Case

-Credit rating company -Altered company credit ratings for a fee -Clients relied on inaccurate information -Fair Credit Reporting Act Issues: (1) accuracy of inputs used to update a specific AIS (2) protection of users of credit info and protection of indiv. whose credit info is gathered by a private company

smishing is a form of: a. fishing b. local area network c. computer worm d. identity theft

D

Fraud is estimated to cost the US how much each year?

1 trillion dollars

the FBI estimates how much of all cybercrime is detected?

1%

the symptoms of employee fraud

1. accounting irregularities 2. internal control weaknesses 3. anomalies 4. lifestyle changes 5. behavioral changes

ways to prevent and detect cybercrime and fraud

1. enlist top management support 2. increase employee awareness and education 3. asses security policies and protect passwords 4. implement controls 5. identify computer criminals 6. maintain physical security 7. recognize the symptoms of employee fraud 8. use data driven techniques 9. employe forensic accountants

3 ways to prevent computer viruses

1. firewalls 2. antivirus software 3. antivirus control procedures

the systems of auditing standards No. 99 identifies two types of accounting related fraud

1. fraudulent financial reporting (cooking the books) 2. misappropriation of assets (stealing assets)

ethical issues in computer usage

1. honesty 2. protecting computer systems 3. protecting confidential information 4. social responsibility 5. acceptable use 6. rights of privacy

whats the most common form of motivation for fraud?

1. money 2. promotion opportunities 3. retaliation

the fraud triangle

1. motivation/pressure 2. opportunity 3. rationalization

why is cybercrime growing?

1. the exponential growth in the use of computer resources 2. continual lax security

for an activity to be determined computer fraud it must involve (2)

1. the use of computer to create an intentional, dishonest misrepresentation of fact 2. the intentional attempt to cause another person or business to do or refrain from doing something which causes loss

data diddling is a problem because

1. these data are often proprietary 2. may give a firm a competitive advantage 3. sometimes an organizations most valuable asset

the types of computer fraud and abuse that the CFAA identifies

1. unauthorized theft, use, access, modification, copying, or destruction of software/data 2. theft of money by altering computer records or theft of computer time 3. intent to illegally obtain info or tangible property through computer use 4. use or the conspiracy to use computer resolves to commit a felony 5. theft, vandalism, or description of computer hardware 6. trafficking in passwords or other login info 7. extortion that uses a computer system as a target

Which of the following is NOT an example of computer fraud? a. entering invoices into the AIS for services that were not provided and depositing the check in a private bank account b. sending an email to everyone in your address book asking for a $1 donation c. programming a change to decrease the dividend payment to stockholders of a firm and issuing a check to your friend for the total change d. using a university computer to set up a realistic looking "virtual store" to sell toys, although you don't have any - you just don't have time to get real job and need some money to cover the rent

B

which of these is not helpful in attempting to thwart computer crime and abuse? a. enlist the support of top management b. keep employees in the dark so that they cannot penetrate them c. use strong words d. design and test disaster recovery programs

B

What is it called when someone intentionally changes data before, during, or after they are entered into the computer (with the intent to illegally obtain information or assets?) a. trojan horse b. logic bomb c. data diddling d. a cookie

C

which of the following pieces of computer legislation is probably the most important? a. cyber security enhancement act of 2002 b. computer security act of 1987 c. computer fraud and abuse act of 1986 d. federal privacy act of 1974

C

The TRW case is notable because: a. the amount of dollars involved was not significant b. no one got caught c. the fraud was detected by a surprise audit d. the real victims are TRW customers

D

a local area network administrator receives a call from an employee requesting his password. the person calling is not a real employee. this is an example of: a. a DOS system b. security trojan horse c. a worm d. social engineering e. a security policy

D

virus

a code that attaches itself to other innocent files or programs and replicates itself

cybercrime

a general term that refers to any criminal activity that involves computers or networks; also referred to as e-crime or computer crime can involve direct attacks on computers/networks (w/ viruses or denial of service) or the use of computers/networks to commit a crime

malware

a term for many types of malicious or damaging software (mal-malicious ware-software)

computer fraud and abuse act of 1986

act makes it a federal crime to intentionally access a computer for purposes such as (1) obtaining top-secret military info or personal financial or credit info, (2) committing a fraud, or (3) altering or destroying federal info amendment: prohibits unauthorized access to a protected computer and illegal possession of stolen "access devices," which includes passwords and credit card numbers

Association of Certified Fraud Examiners (ACFE)

an international professional organization committed to detecting, deterring, and preventing fraud and white collar crime

CFAA

computer fraud and abuse act of 1986 states that computer fraud is an illegal act and computer technology is essential for preparation, investigation, or prosecution

Computer Security Institute (CSI)

conducts an annual survey to help determine the scope of cybercrime in the US

fraudulent financial reporting occurs when

corporate officials intentionally falsify accounting records to mislead analysts, creditors, or investors

cyber security enhancement act of 2002

this act permits the US Sentencing Commission to review and, if appropriate, amend guidelines and policy statements applicable to persons convicted of a computer crime to reflect the serious nature of (1) the growing incidence of computer crimes, (2) the need for an effective deterrent, and (3) appropriate punishment to help prevent such offenses

phishing scams

use email or websites that claim to be legitimate but that ask you to provide or update your personal info such as account number, credit card number, or password

social engineering

when hackers pose as bonafide employees and convince network administrators to give them passwords over the phone

what is essential for a computer related crime prosecution?

willful intent