Computer Fraud in Accounting Environment: UK Commercial Organizations

This report delves into the pervasive issue of computer fraud within the accounting environment, specifically focusing on commercial organizations in the UK. It begins by introducing the increasing complexity of the business world due to technological advancements and how this impacts accounting practices. The report outlines several key research objectives, including identifying common types of computer fraud, exploring fraud detection and prevention techniques used by UK companies, and assessing the impact of computer usage on the frequency and magnitude of fraud. A thorough literature review examines existing research on accounting fraud, the fraud triangle theory, and the application of forensic accounting. The research methodology involves qualitative in-depth interviews with stakeholders. The report concludes by emphasizing the need for robust fraud detection and prevention measures within the UK's commercial sector. References to key research papers are also provided.

Running head: COMPUTER FRAUD IN ACCOUNTING ENVIRONMENT
Computer Fraud in Accounting Environment
Name of the Student
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Table of Contents
Introduction......................................................................................................................................2
Research Objectives.........................................................................................................................3
Literature Review............................................................................................................................4
Research Methodology....................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

2COMPUTER FRAUD IN ACCOUNTING ENVIRONMENT
Introduction
The contemporary business world, with the advent of new technologies, new modes of
operation, newer players and new types of specialization, is becoming more and more diverse
and complex. The innovations in the technological aspects, like any other field, also have
immense implications on the way of doing business in the contemporary business world (Taylor,
Fritsch & Liederbach, 2014). Accounting, being a practice closely attached to the commercial
operations, is also affected by these technological innovations, especially that of the usage of
computers. It is a unanimously accepted fact that, computer and its usage are becoming
inevitable for the purpose of accounting in the business organizations, irrespective of their size,
location and area of operation. However, the application of the usage of the computers has their
pros as well as cons in the accounting practices.
With the advent of internet and computers, the accounting process has been eased
considerably and the complex business accounts, which were otherwise difficult to be done
manually, have been made substantially easier with the usage of these machines. However, the
new age technologies have also made the accounting practice vulnerable to various frauds and
unfair practices and this is one of the primary concerns in the accounting environment. This is
because these activities involve the personal and classified financial details of individuals as well
as companies and a breach in the security can compromise the safely of the same extensively
(Sharma & Panigrahi, 2013).
The paper proposes to take into account this problem of occurrence and variance of new
types of frauds in the usage of computers in the accounting environment. The paper specifically
targets the application of the same in the commercial organizations of the UK and tries to

3COMPUTER FRAUD IN ACCOUNTING ENVIRONMENT
analyze the problems the organizations in the concerned place experience, the types of
techniques used by the same to tackle these problems and the possible and more effective way
outs from them.
Research Objectives
The study tries to address several key questions of substantial concern regarding the
aspect of frauds in the computer usage in the perspective of the organizations in the UK. The key
research questions are as follows:
a) What type of computer frauds usually occur in the accounting environment of the companies
in the UK?
b) What are the techniques that are usually used by the companies in the concerned place to
tackle detect and prevent the computer frauds in the accounting environment?
c) Has the usage of computer for accounting operations led to an increase in the number and the
magnitude of frauds occurring in the commercial organizations of the country?
d) What role does the Information Technology aspect actually play in the detection and
prevention of computer frauds?
e) Is there any scope of improvement in the aspect of the internal controlling systems in the
commercial organizations, with respect to the current technologies existing in this aspect, which
can be undertaken to detect as well as to prevent the accounting frauds done with the help of
computers?

4COMPUTER FRAUD IN ACCOUNTING ENVIRONMENT
f) What are the measures that can be undertaken in this respect to make the computer fraud
detection as well as prevention sounder for the concerned places?
Literature Review
Accounting frauds and frauds in usage of computer have been a primary issue of concern
among the participants in the commercial transactions and operations in the global business
world. A lot of research and studies have been carried out regarding the nature, emergence,
bothering issues and the probable way outs in this aspect over the years (Willis, 2017).
Hall, (2012) in his research paper, tries to define the accounting fraud with respect to
computer usage, as the deliberate misuse of the technology in omitting financial amount from the
account of a commercial enterprise, with the help of the financial statements that are in their
disposal. The people involving in this case are either the investors or the creditors, who involve
themselves in such practices to maximize their personal benefits, at the cost of the welfare of the
enterprise and the security compromise of the clientele attached with them.
Kassem & Higson, (2012) in this context, takes into account the Theory of Fraud
Triangle, according to which, frauds in a general context occur in steps. The steps, as mentioned
by the authors are namely the pressure which the individuals feel, like that of debt problems and
lifestyle problems. Another step is the opportunity for committing fraudulent activities, the
ability of rationalizing the crime by the fraudulent individuals, cumulatively which leads to the
frauds that occur in any business organizations in a general framework.
In the elaborate work regarding the accounting frauds in the new age business
environment in the international perspective, Nigrini, (2012) tries to focus on the applicability of
the new type of accounting, like that of the forensic accounting and the application of the same

5COMPUTER FRAUD IN ACCOUNTING ENVIRONMENT
for the purpose of auditing and detection of frauds which occur commonly in the current times.
The author tries to take into account the primary types of digital frauds that occur usually in the
current times. The primary ones include theft of identity, inventions of malwares and spywares,
cloning of website, cyber stalking and corrupting viruses.
With the huge amounts and varieties of computer and digital frauds in the accounting
aspects, in the current commercial scenario, it becomes of utmost importance for the commercial
enterprises and the accounting and auditing professionals to design way outs to detect as well as
prevent the digital frauds. Salem, (2012), in the research article, talks about the effective ways of
fraud detecting and managing the problems in the contemporary business world. The author
asserts on the need for a monitored, detailed and regulated framework of assessing risks, under
which the fraud schemes, internal to the organization can be identified. He also emphasizes on
the importance of the fraud detection digital tools. According to the findings of the author, tips
and hotlines are not sufficient for controlling and preventing the digital frauds occurring
nowadays as the author asserts that 46% of all the frauds cannot be solved with the help of such
techniques and tips giving.
Hutchings, (2013) agrees with the views of Salem, (2012) regarding the measures which
can be undertaken by the commercial enterprises to rule out the problems regarding the
emergence of new types of digital hacking. He includes the importance of training of the
employees in an organization, regarding the detection of fraudulent activities on part of the
investors as well as the creditors. The author also talks about the new ways of accounting and
new digital tools which can have prospects in the near future in the development of a robust
monitoring framework which can in its turn help in detecting and preventing the digital frauds.

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Pedneault et al., (2012), incorporates the idea of the prospects of the implementation of
the forensic accounting as a way out for the detection of frauds in the new age digital market.
According to the elaborate studies conducted by the authors, this genre of accounting has
emerged in the recent times and is specifically targeted towards monitoring, detection and
prevention of the computer frauds that occur frequently in the enterprises. As per the assertions
of the authors, this way of accounting can also be used for the detection of the new types of
fraudulent activities, both on the demand side as well as on the supply side (Gbegi & Adebisi,
2014).
The problem of digital frauds in the domain of accounting practices is quite common in
the global business scenario as a whole and UK is not any exceptions. Though the business
framework and the accounting practices of the commercial enterprises in the country has been
quite robust, there still exists vulnerability of the financial details due to the widespread usage of
internet and digitalization as newer fraudulent activities keep on coming up.
Research Methodology
For the purpose of studying the above mentioned research questions the paper intends to
take conduct a qualitative in depth interview with the relevant individuals, including players
from both the sides, demand side (investors) and the supply side (accountants and managers of
private enterprises). The questionnaire to be used will incorporate questions regarding their
views regarding the common problems of fraud in the UK companies, their perceptions
regarding these problems and what, according to them, can be done to eradicate or at least
diminish the degree of severity of the problem in the concerned place. The results are proposed

7COMPUTER FRAUD IN ACCOUNTING ENVIRONMENT
to be both quantitatively (Using relevant statistical software, SPSS) and qualitatively analyzed
(Cooper, Dacin & Palmer, 2013).
Conclusion
As has been discussed in the above sections of the research proposal, the new age
business operations in the global commercial scenario, with the emergence of newer
complexities and variations, are changing dynamics hugely with advents of new technological
innovations. The digitalization o one hand, though makes the accounting process easy and more
comprehensive, it also affects the business operations negatively, by expanding the scopes of
frauds and unfair activities extensively. In this context, the paper proposes to view the situations
prevailing in the commercial scenario of the UK companies. For doing the same, the paper
proposes to conduct interviews with the relevant personnel and analyze the results, both
quantitatively and qualitatively to come to proper conclusion regarding the findings.

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References
Cooper, D. J., Dacin, T., & Palmer, D. A. (2013). Fraud in accounting, organizations and society:
Extending the boundaries of research.
Gbegi, D. O., & Adebisi, J. F. (2014). Forensic accounting skills and techniques in fraud
investigation in the Nigerian public sector. Mediterranean Journal of Social
Sciences, 5(3), 243.
Hall, J. A. (2012). Accounting information systems. Cengage Learning.
Hutchings, A. (2013). Hacking and fraud: A qualitative analysis of online offending and
victimisation. Global Criminology: Crime and Victimization in the Globalized Era, 93-
114.
Kassem, R., & Higson, A. (2012). The new fraud triangle model. Journal of Emerging Trends in
Economics and Management Sciences, 3(3), 191.
Nigrini, M. (2012). Benford's Law: Applications for forensic accounting, auditing, and fraud
detection (Vol. 586). John Wiley & Sons.
Pedneault, S., Silverstone, H., Rudewicz, F., & Sheetz, M. (2012). Forensic accounting and
fraud investigation for non-experts. John Wiley & Sons.
Salem, M. S. (2012). An overview of research on auditor's responsibility to detect fraud on
financial statements. Journal of Global Business Management, 8(2), 218.
Sharma, A., & Panigrahi, P. K. (2013). A review of financial accounting fraud detection based
on data mining techniques. arXiv preprint arXiv:1309.3944.

9COMPUTER FRAUD IN ACCOUNTING ENVIRONMENT
Taylor, R. W., Fritsch, E. J., & Liederbach, J. (2014). Digital crime and digital terrorism.
Prentice Hall Press.
Willis, L. E. (2017). Performance-Based Remedies: Ordering Firms to Eradicate Their Own
Fraud. Law and Contemporary Problems, 80(3), 7-41.