Terminology and Definitions of Fraud, Ethics, and Financial Reporting, Quizzes of Accounting

Download Terminology and Definitions of Fraud, Ethics, and Financial Reporting and more Quizzes Accounting in PDF only on Docsity! TERM 1 stewardship DEFINITION 1 -the careful and responsible oversight and use of the assets entrusted to management TERM 2 code of ethics DEFINITION 2 -used by management to maintain internal control TERM 3 fraud DEFINITION 3 -the theft, concealment and conversion to personal gain of another's money, physical assets or information TERM 4 misappropriation of assets DEFINITION 4 -involves theft of any item of value -aka defalcation or internal theft TERM 5 misstatement of financial records DEFINITION 5 -involves the falsification of accounting reports -aka earnings management or fraudulent financial reporting TERM 6 fraud triangle DEFINITION 6 -the three conditions needed in order for a fraud to be perpetrated: incentive (pressure), opportunity and rationalization (attitude) TERM 7 management fraud DEFINITION 7 -fraud conducted by one or more top-level managers within the company -usually in the form of fraudulent financial reporting TERM 8 management override DEFINITION 8 -fraud involving top management's circumvention of the system or internal controls that are in place TERM 9 employee fraud DEFINITION 9 -fraud conducted by nonmanagement employees TERM 10 kickback DEFINITION 10 -a cash payment that the vendor gives the employee in exchange for the sale -like a business bribe TERM 21 trojan horse program DEFINITION 21 -a small, unauthorized program within a larger, legitimate program, used to manipulate the computer system to conduct a fraud TERM 22 trap door alteration DEFINITION 22 -a valid programming tool that is misused to commit fraud TERM 23 hacking DEFINITION 23 -the term commonly used for computer network break-ins TERM 24 denial of service attack DEFINITION 24 -intended to overwhelm an intended target computer system with so much bogus network traffic that the system is unable to respond to valid network traffic TERM 25 spoofing DEFINITION 25 -occurs when a person, through a computer system, pretends to be someone else TERM 26 Sarbanes-Oxley Act DEFINITION 26 -intended to reform accounting, financial reporting and auditing functions of companies that are publicly traded in stock exchanges TERM 27 preventive controls DEFINITION 27 -designed to avoid errors, fraud or events not authorized by management TERM 28 detective controls DEFINITION 28 -must be included in an internal control system -help employees to uncover errors TERM 29 corrective controls DEFINITION 29 -the steps undertaken to correct an error or problem uncovered via detective controls TERM 30 Committee of Sponsoring Organizations DEFINITION 30 -because of ongoing problems with fraudulent financial reporting, this committee undertook a comprehensive study of internal control environments that are considered more risky and less risky TERM 31 risk assessment DEFINITION 31 -companies consider existing threats and the potential for additional risks and stand ready to respond should these events occur in order to maintain control over threats to its business by doing this TERM 32 compensating control DEFINITION 32 -lessens the risk of negative effects when other controls are lacking TERM 33 audit trail DEFINITION 33 -presents verifiable information about the accuracy of accounting records TERM 34 reasonable assurance DEFINITION 34 -means that the controls achieve a sensible balance of reducing risk when compared with the cost of the control TERM 35 Control Objectives for Information Technology DEFINITION 35 -an extensive framework of information technology controls - extremely important guidance for those who design or audit IT systems