AIS (risk and exposure) (copy) 1st page

4. Misplacement of orders from customers or unfilled backorders

Losses of revenue and alienation of customers

5. incorrect postings of sales to accounts receivable records

Incorrect balances in accounts receivable and general ledger accounts records (e.g., overstatement of Mary Smith's balance)

6. Postings of revenues to wrong accounting periods such as premature bookings of revenues

Overstatement of revenue in one year (such as the year of premature booking)

7. Fictitious credit sales to nonexistent customers

Overstatement of revenues and accounts receivable

8. Excessive sales returns and allowances, with certain of the credit memos being for fictitious returns

Losses in net revenue, with the proceeds from subsequent payments by affected

9. Theft or misplacement of finished goods in the warehouse or on the shipping dock

Losses in revenue; overstatement of inventory on the balance sheet

10. Fraudulent write-offs of customers' accounts by unauthorized persons

Understatement of accounts receivable; losses of cash receipts when subsequent collections on written-off accounts are misappropriated by perpetrators of the fraud

11. Theft (skimming) of cash receipts especially currency, by persons involved in the processing; often accompanied by omitted postings to affected customers' accounts

Losses of cash receipts; overstatement of accounts receivable in the subsidiary ledger and the balance sheet

12. Lapping of payments from customers when amounts are posted to account receivable records

Losses of cash receipts; incorrect account balances for those customers whose records are involved in the lapping

13. Accessing of accounts receivable, merchandise inventory, and other records by unauthorized persons

Losses of security over such records, with possibly detrimental use made of the data accessed

14. Involvement of cash, merchandise inventory, and accounts receivable records in natural or human-made disasters

Losses of or damages to assets

15. Planting of virus (e.g., logic bomb) by disgruntled employee to destroy data on magnetic media

Loss of customer accounts receivable accounts data needed to monitor collection of amounts from previous sales

16. Interception of data transmitted between customers and the Web site

Loss of data which may be used to the detriment of customers

17. Unauthorized viewing and alteration of other customer account data via the Web

Loss of security over customer records resulting in a misstatement of accounts receivable balances

18. Denial by a customer that an on-line order was placed after the transaction is processed

Loss of sales revenues

19. Use of stolen credit cards to place orders via the Web

Loss of shipped goods for which payments will not be received

20. Breakdown of the Web server due to unexpected high number of transactions

Loss of sales revenues and alienation of customers