Why do fraudulent acts often go unreported and are therefore not prosecuted?
Answer: Most fraud cases go unreported and are not prosecuted for several reasons. Many cases of computer fraud are as yet still undetected. As new technology and methods become available to organizations, prior undetected fraud may be revealed in the future. A second reason is that companies are reluctant to report computer fraud and illegal acts simply because of bad publicity—a highly visible case can undermine consumer confidence in an organization such as a financial institution. Also, the fact that a fraud has occurred may indeed encourage others to attempt to commit further acts against the organization. It would seem that unreported fraud creates a false sense of security, as people think systems are more secure than they are in reality. Another reason for not reporting fraudulent acts is the fact that the court system and law enforcement is busy with violent crimes and criminals in its system. There is little time left to go after a crime where no physical harm is present. Also, the court system tends to treat teen hacking and cracking as "acts of childhood" rather than as serious crimes—this leads to many plea bargains when a computer fraud is brought to trial. Another reason is that a computer fraud case is difficult, costly, and time-consuming to investigate and prosecute. Before 1986 no federal law existed governing computer fraud. Law enforcement officials, lawyers, and judges generally lack the computer skills necessary to properly evaluate, investigate, and prosecute computer crimes. Sadly, when all is said and done a successful prosecution and conviction of computer fraud results in a very light sentence. All of these factors contribute to the under reporting and lack of prosecution of computer fraud crimes. Not everyone agrees on what constitutes computer fraud:
• Many networks have a low level of security
• Many Internet pages give instruction on how to carry out computer crimes
• Law enforcement has difficulty keep up with the growing number of computer frauds
• The total dollar value of losses from computer fraud is difficult to estimate.
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Computer Fraud
- Which of the following is not a way to improve fraud detection?
- Which of the following is not a way to reduce fraud losses?
- Which of the following is not a way to make fraud less likely to occur?
- The fraud appears to be misappropriation of assets that is being concealed with a lapping scheme. Controls would include:
- Describe four ways companies can reduce losses from fraud.
- Describe at least four ways a company can make fraud less likely to occur.
- What are the actions recommended by the Treadway Commission to reduce the possibility of fraudulent financial reporting?
- _____ is a simple, yet effective, method for catching or preventing many types of employee fraud.
- On Tuesday morning, Chen Lee, Chief Information Officer at American Trading Corporation (ATC), got some bad news. The hard drive use to store system data backups was lost while it was being transported to an offsite storage location. Chen called a meeting of her technical staff to discuss the implications of the loss. Which of the following is most likely to relieve her concerns over the potential cost of the loss?
- Which of the following will not reduce the likelihood of an occurrence of fraud?
- Most frauds are detected by
- Why is computer fraud on the rise?
- Downloading a master list of customers and selling it to a competitor is an example of
- The simplest and most common way to commit a computer fraud is to
- The fraud that requires the least computer knowledge or skill involves
- Why do many fraud cases go unreported and unprosecuted?
- Why is computer fraud often more difficult to detect than other types of fraud?
- Why is computer fraud often much more difficult to detect than other types of fraud?
- How does the U.S. Justice Department define computer fraud?
- Which of the following is least likely to result in computer fraud?
- What are some of the distinguishing characteristics of fraud perpetrators?
- The most efficient way to conceal asset misappropriation is to
- This component of the fraud triangle explains how perpetrators justify their (illegal) behavior.
- What is the most prevalent opportunity within most companies to commit fraud?