College: Khawarizmi Intrnational College
Learning Outcomes being assessed:
LO1: Apply accounting information system to the business environment.
LO 2: Explain how accounting information systems support business activities and process different transaction cycles
LO3: Recognize computer fraud and fraud prevention techniques.
In order to retain the confidentiality of financial data and protect them from rogue exploitation to pursue the vested interests of the anonymous frauds and invaders, companies need to acquire insight regarding the nature of typical financial frauds and about the legislative assistances that they might seek to overcome the consequences of the respective financial frauds. The underlying study is supposed to project two typical cases along with the nuances of the corresponding legislative measures in order to draw a conclusion that might alert identical concerns from further financial debauchery.
Q1. Report on the cases of fraud
The case study in this article indicates to a case of financial fraud prevalent in Dubai lasted for four years where the executive manager of a reputed provincial Information Technology unit has been accused of financial fraud against a government entity. The amount that the respective IT unit has been able to fraud is over 20 million dirham.
In accordance with the public accounts, the director general of the respective IT Company has been able to persuade the government entity about the implementation of a specific technical programme with an expenditure of 20 million dirham. In terms of the unilateral agreement, the participants have agreed over the standards and specifications of the respective technical programme that contains the possibility to be utilized by a US based specialized unit.
On the contrary, the director general of the IT Company have violated the terms of agreement and implemented the programme somewhere else in Dubai while demonstrating gross differences from the promised specifications and standards. Apart from enjoying ill-advantages of his designation, the director general have established a fake concern along with some of his colleagues including a former director of the respective unit which has been deciphered when one of the officers found the IT Company as a recipient of financial payment in US Dollars.
After four years of legal proceedings, The Expertise Disputes Settlement Department of Dubai Courts have accused the director general guilty and sentenced him to imprisonment for five years with a deportation further.
This case is supposed to divulge a virtual financial fraud where the anonymous cyber invader has frequently hacked the email communication portal of a reputed trading company simply by persuading the account officers and prospective suppliers with an opportunity of financial gain from overseas banks.
As the accounts of circumstantial investigation suggest, the hijacked first tantalized the accountants with a convincing plea of implementing a certain malware, which they receive in form of a spoofed email attachment along with alluring content. Installation of the malware causes catastrophic consequences where it started recording some of the confidential screenshots regarding financial data along with key strokes while updating it simultaneously to the invader in the form of emails in every half hour.
Further investigations suggest that the host of the private mail server, which enables the invader to record data as emails, is GoDaddy, which happens to be a established virtual hosting unit. The hacked is observed to monitor the financial statements and knowledge regarding the encounter between potential buyers and suppliers and simultaneously sending follow-ups and invoices of convincingly manipulated bank statements.
When the relevant authority has been able to take the virtual invader in custody, he confesses that his principal targets are the financial departments of some of the established business units operating in UAE, which is evident from the trend that he has been able to exhibit in terms of modus operandi.
Q2. Recognition and legal recommendations
As per the regulatory provisions prevalent in the federal and Shariah courts of UAE legal system, the first case can be considered as an act of corporate or business fraud since the nuances of the case resembles with the demonstrations of Article 399 of UAE Penal code. The government entity, as a plaintiff, can be recommended to seek assistance of this provision since the director general has been found with wrongful funds and can claim for a loss of trade license along with closure of business (McMahon, 2016).
In the second case, it is very evident from the brief report that it is a case of financial fraud availed by virtual means and can easily be incorporated with the established notion of cyber crime. In this regard, the trading company in UAE must seek assistance of UAE Commercial Transaction Law (Federal Law No.18 of 1993) along with the UAE Cyber Crimes Law (Federal Law No. 5 of 2012)
Q3. Applying accounting understandings
As it is very rife these days for virtual invaders to get access of the financial statements of trading and several other business concerns, the corresponding investigators has able to decipher the trend of atrocities in terms of accountancy. It has been seen that invaders are prone to use spoofed email accounts in order to derive the bank details and other confidential financial data in the name of addressing the appeals of due (Abbott, 2016). Except the first case, they are prone to administer malwares, which is potent enough to transcend the installed security mechanisms.
Thus, as per the accounting acumen, installation of circumvent domestic audit systems is the global recommendation for each concern vulnerable to such attacks.
It is true, as per the statement of the Vice President MENA of Torrid Networks FZE who have mastered the second case, that in order to ensure the security of the financial statements the companies require developing the insight regarding the nascent trends financial fraud (Ege, 2014). In this regard, the maxim of the Director of the Expertise Disputes Settlement Department of Dubai courts can be posed where he appear alerting the companies to encourage efficient domestic auditing systems along with keeping secure tracks of their file contracts in order to evade the vulnerability of financial frauds.