Electronic Fraud (e-fraud). What is it? In essence, e-fraud is the intentional deception or misrepresentation made by an individual that could result in some unauthorized benefit to them, committed with the aid of, or directly involving, a data processing system or network. Accessing certain public or private computer systems without authorization or in excess of one’s authorization is likely punishable as a crime. E-fraud, commonly referred to under the umbrella of “computer crime,” is of domestic and international concern. Crimes of this nature have grown exponentially as the use of communications lines, databases and networks have grown. Billions of dollars, at a minimum, have been lost to the government, corporations and individuals through computer crime. That number is expected to extend into the trillions.
There are four general types of computer crimes: 1) The computer as a target (e.g., theft of intellectual property, marketing information, or blackmail information gained from computerized files); 2) Computer as the instrumentality of the crime, i.e., the processes of the computer not the contents of the computer files (e.g., use of ATM cards and accounts; theft of money from accrual, conversion, or transfer accounts, and credit card fraud); 3) Computer is incidental to other crimes (e.g., money laundering and unlawful banking transactions, organized crime records and books); 4) Crimes associated with the prevalence of computers (e.g., software piracy/counterfeiting, copyright violation of programs, and theft of technological equipment) (1).
E-fraud raises issues from the overall ethics involved with the use of electronic systems, to the detection of and the security measures to protect against the crime of electronic fraud. E-fraud is of great concern to the welfare of accurate accounting and reporting of financial positions. Accounting staffs, including internal and external auditors, have extra burdens in dealing with E-fraud in the protection of governmental and business and individual assets. A historical look at committing and detecting computer crime and its evolution, the current state of the art, current applications, as well as the people, processes and technology involved will prove valuable in understanding the e-fraud issues that have and continue to confront society.