FORENSIC ACCOUNTING - BA124 - 2011Slide 25-1

1
Todays Topics

• E-Commerce Fraud
• E-Commerce Fraud Risks
• E-Commerce Fraud Prevention

2
E-CommerceThe Good, The Bad The Ugly

• The Good
• Faster, cheaper and less prone to error
• Customer centric
• The Bad
• Hardware issuesspotted owl disease
• False sense of organization
• Initial cost and implementation issues
• Emerging economy issueshaves and have-nots
• The Ugly
• The bad guys and hackersour focus today

3
Consider This

• The race to 60 million users
• Radio30 years
• TV15 years
• The Internet3 years to 90 million users

4
E-Commerce Fraud Risks

• P O Rsee text

5
E-Commerce Fraud Prevention

• Difficult to impact pressure and rationalization
  at this time
• Lack of personal contact with fraudsters
• Avoid iffy situations and sketchy firms
• Focus on reducing opportunities

6
Prevention in the Opportunity Sector

• The control environment
• Integrity and ethics
• Board and Audit Committee involvement
• Tone at the Top
• Human resource policies and practices (training)
• Risk assessment efforts
• Implementation of control activities

7
Risk Assessment

• Data theft is the big issuenot cash
• Sniffing for passwords
• Unauthorized password access
• False identification of users
• Spoofing for headers and IP (protocol models)
• Impersonation of customers
• False or misleading websites
• Hijacking to copy-cat websites

8
Prevention Through Control Activities

• Separation of duties
• Authorization techniques
• Firewalls
• Passwords
• Digital signatures
• Biometrics
• Documentation and encryption
• Physical control
• Independent assessment (operational auditing)
• On-going not spot-checking

9
E-Commerce Fraud Detection

• Proactive posture
• On-going analysis and effort
• Defending the Digital Frontier, Mark Doll, Sajay
  Rai and Jose Granado. Ernst Young, LLP.