Managing Risk, Ensuring Privacy and Preventing Fraud - Risk Management in a Computerized Accounting System

Abstract

There are many forms of risk management in our professional world which from an integral part of Practice management. Many corporations today consider market risk, credit risk, operational risk, legal risk and other business risks. Operational risks include fraud and security breach. Information is stored and retrieved by a personal identifier such as name, Social Security Number (SSN), fingerprint or other unique symbol. Since computer technology has made it possible to store, retrieve and manipulate data quickly and efficiently, additional safeguards are needed to ensure that personal data contained in IT systems are protected from unauthorized and illegal use. Computer professional have the oversight responsibility for information privacy because they have the most extensive knowledge of their organization’s systems and programs and an intimate understanding of the data. Thus, the competence of these professionals in ensuring sound practice of information privacy is of great importance to both researchers and practitioners. The role of auditing in improving the performance of the organization implicitly leads to more responsibilities of the auditors in identifying and finding fraud. Consequently, the audit has become a critical active element in managing fraud phenomena which bring about negative effects on the fulfillment of the objectives of the served entities. This paper addresses the challenges in managing risks with special focus on two risks faces in the computerized financial world – Preventing Fraud and Ensuring Privacy.