everything on managment ppt definition info etc.ppt

everything on managment with definition and information

1. FORENSIC ACCOUNTING - BA124 - 2015
Today’s Topics

E-Commerce Fraud

Cash Flow Shenanigans

Metrics Shenanigans

2. FORENSIC ACCOUNTING - BA124 - 2015
E-Commerce Fraud

3. FORENSIC ACCOUNTING - BA124 - 2015
E-Commerce
The Good, The Bad & The Ugly

The Good

Faster, cheaper and less prone to error

Customer centric

The Bad

Hardware issues…spotted owl disease

False sense of organization

Initial cost and implementation issues

Emerging economy issues…haves and have-nots

The Ugly

The bad guys and hackers…our focus today

4. FORENSIC ACCOUNTING - BA124 - 2015
Consider This…

The race to 60 million users

Radio—30 years

TV—15 years

The Internet—3 years to 90 million
users

5. FORENSIC ACCOUNTING - BA124 - 2015
E-Commerce Fraud Risks

P – O – R…see text

6. FORENSIC ACCOUNTING - BA124 - 2015
E-Commerce Fraud
Prevention

Difficult to impact pressure and
rationalization at this time

Lack of personal contact with
fraudsters

Avoid “iffy” situations and “sketchy”
firms

Focus on reducing opportunities

7. FORENSIC ACCOUNTING - BA124 - 2015
Prevention in the
Opportunity Sector

The control environment

Integrity and ethics

Board and Audit Committee involvement

Tone at the Top

Human resource policies and practices (training)

Risk assessment efforts

Implementation of control activities

8. FORENSIC ACCOUNTING - BA124 - 2015
Risk Assessment

Data theft is the big issue…not cash

Sniffing for passwords

Unauthorized password access

False identification of users

Spoofing for headers and “IP” (protocol
models)

Impersonation of customers

False or misleading websites

Hijacking to copy-cat websites

9. FORENSIC ACCOUNTING - BA124 - 2015
Prevention Through
Control Activities

Separation of duties

Authorization techniques

Firewalls

Passwords

Digital signatures

Biometrics

Documentation and encryption

Physical control

Independent assessment (operational auditing)

On-going not spot-checking

10. FORENSIC ACCOUNTING - BA124 - 2015
E-Commerce Fraud
Detection

Proactive posture

On-going analysis and effort

Defending the Digital Frontier, Mark
Doll, Sajay Rai and Jose Granado.
Ernst & Young, LLP.

11. FORENSIC ACCOUNTING - BA124 - 2015
Final Shenanigans

Cash Flow Shenanigans

Metrics Shenanigans

12. Cash Flow
Shenanigans
CFS #1: Shifting Financing inflows to
Operating inflows
CFS #2: Shifting Operating outflows to
Investing outflows
CFS #3: “Inflating” Operating inflows through
normal but infrequent ops
CFS #4: “Inflating” Operating inflows through
normal operations
FORENSIC ACCOUNTING - BA124 - 2015

13. CFS #1
Bank borrowings as CFO
Sale of receivables as CFO
Sham sale of receivables as CFO
FORENSIC ACCOUNTING - BA124 - 2015

14. CFS #2
Boomerang transactions
Capitalization of operating expenses
Treating inventory purchases as investing
activities
FORENSIC ACCOUNTING - BA124 - 2015

15. CFS #3
Inheriting cash flows via acquisition
Acquisition of customers or products
Structuring a divestiture to benefit operating
cash flows
FORENSIC ACCOUNTING - BA124 - 2015

16. CFS #4
Paying vendors more slowly
Collecting from customers more quickly
Purchasing less inventory
Limited disclosure of one-time benefits
FORENSIC ACCOUNTING - BA124 - 2015

17. Metrics Shenanigans
MS #1: Misleading metrics that overstate
performance
MS #2: Distorting metrics that avoid bad news
FORENSIC ACCOUNTING - BA124 - 2015

18. MS #1
Proforma revenue metrics
Proforma earnings metrics
Proforma cash flow metrics
FORENSIC ACCOUNTING - BA124 - 2015

19. MS #2
Distorting A/R metrics
Distorting inventory metrics
Distorting financial asset metrics
Distorting debt metrics
FORENSIC ACCOUNTING - BA124 - 2015