Computer crimes and internal auditor

• Main Authors: Chua, Siew Mei, Leong, Stella Li Chern, Oh, Hong Chuan
• Other Authors: Joanne Tay
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::Auditing
• Online Access: http://hdl.handle.net/10356/51909
• Institution: Nanyang Technological University

In recent years, computer crimes are posing a growing and major threat to organisations around the world. This is due mainly to the fact that organisations are relying more on technology and people are also becoming more computer literate. In order to deter people from directly or indirectly committing computer or computer related crimes, the Computer Misuse Act (Chapter 50A) was enacted on 30 August 1993. Information security is needed to preserve the continuity, integrity and confidentiality of information resources. Thus, to secure such resources, organisations need preventive, detective and corrective controls. As organisations get bigger, the presence of internal auditor can assist in ensuring the adequacy and effectiveness of the accounting and internal control systems. An internal auditor should not be viewed as distinct from the controls. In fact, internal auditing is most effective when viewed as part of the internal control system. The growth of computerisation also means that internal auditor must Iearn to cope with the audit of computerised systems. As microcomputer operating systems become more user-friendly, audit software applications are also increasingly easy to use. These developments have made it possible to provide internal auditor with hardware and software necessary to carry out most audits without the services oftechnical specialists Three case studies analysis of local crimes provided the scenarios of how the Computers Misuse Act (Chapter 50A) is contravened and how the weaknesses in the internal controls led to the crimes committed. Moreover, there are more than a dozen types of computer fraud techniques and the knowledge of these will enable organisations to better protect themselves against the threat of various computer crimes. The findings of the case studies revealed that both opportunity and intention must be present in order to commit crimes. The fraud techniques are and will become more sophisticated as more people become computer literate. Also the major weakness in internal controls is a result of the loose reinforcement of the requirements of user identification and authentication control system. It is thus strongly recommended that besides improving the user identification and authentication control system, the internal auditor should also take an active role in the organisations’ internal control system. The opportunity for committing computer crimes can be significantly reduced by active participation of the internal auditor in internal control. The internal auditor needs the power and support to contribute effectively to the organisations.