An evaluation of computerised accounting information systems - Essay Example

Recently there has been a rise in the corporate accounting scandals which has spread as an epidemic across various regions (Amudo & Inanga, 2009). The data stored in the computer form a valuable asset for an organisation. This data is eventually used in the exchange of funds in the form of Electronics Funds Transfer (EFT). This type of data has a high value. It includes assets like balances in accounts receivables & accounts receivable, inventory levels, funds balances etc. These assets constitute the tangible form of assets whereas the intangible assets include confidential programs and other confidential financial information.

The financial data is the most prized asset in any financial reporting process. The financial reports presented by the company exercise an important influence on the general society and capital markets. As long as 1958 there was no tabulation or tracking of the computer related crimes. Such incidents have slowly gained momentum and currently the computer crime can be grouped into categories like financial frauds or theft, information theft and vandalism. The conditions that have induced such crimes are related to the internal environment of the firm as well as external environment that encompass the general marketplace.

The internal reasons that contribute to the computer crimes in financial reporting include: The fraudulent fund disbursal is a commonly committed fraud using computers. This is committed by the clerks at the data entry level in accounts payable, benefits section or payroll departments. At the top managerial level financial fraud involves inflating profit figures by misrepresenting the amount of sales. In such cases the higher management arbitrarily raises the sales figures and understates the total business expenses.

This is done by either reducing the amount or carrying forward the expenses to the next accounting year. By deferring the expenses incurred in the current