ADM 4346 Chapter Notes - Chapter 5: Terrorist Threats, Internal Control, Financial Statement

• School: University of Ottawa
• Department: Administration
• Course: ADM 4346
• Professor: Sheldon Weatherstone

Document Summary

Common threats to ais: natural disasters and terrorist threats, software errors and/or equipment malfunction, unintentional acts (human error) Individuals who commit fraud are referred to as white-collar criminals. Forms of fraud: misappropriation of assets, theft of a companies assets, largest factors for theft of assets: Failure to enforce internal control system: fraudulent financial reporting, intentional or reckless conduct, whether by act or omission, that results in materially misleading financial statements (the treadway commission). Reasons for fraudulent financial statements: deceive investors or creditors. Increase a company"s stock price: meet cash flow needs, hide company losses or other problems. Treadway commission actions to reduce fraud: establish environment which supports the integrity of the financial reporting process. Identification of factors that lead to fraud: assess the risk of fraud within the company, design and implement internal controls to provide assurance that fraud is being prevented. Sas #99: auditors responsibility to detect fraud, understand fraud, discuss risks of material fraudulent statements.