4Ed_CCH_Forensic_and_Investigative_Accounting_Solutions_13

4Ed_CCH_Forensic_and_Investigative_Accounting_Solutions_13...

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© 2009 CCH. All Rights Reserved. Chapter 13 147 Chapter 13 Investigation of Electronic Data: A Brief Introduction CHAPTER SUMMARY Overview Computer forensics is the analysis of electronic data and residual data for the purposes of its recovery, legal preservation, authentication, reconstruction, and presentation to solve or aid in solving technology-based crimes. Useful digital courtroom evidence is evidence that can be legally viewed as ‘‘witnessing’’ an event and providing reliable identi f cation of the user of a computer. Generally, useless digital courtroom evidence is classi f ed as hearsay evidence albeit documentary hearsay. Introduction to Electronic Evidence ¶13,001 Perspectives on Investigation Electronic evidence of a crime is contained on employer-owned personal computers (PCs) and mainframes, employees’ personal PCs, the company’s network, personal data assistants, digital cameras, pagers, external drives, dongles (security devices that must be connected to a computer in order for certain software to run), disk sticks, scanners, F oppy disks, smart cards, cell phones, and web servers in external networks. Such electronic evidence easily and unintentionally can be destroyed or made inadmissible as courtroom evidence by the actions of those who f rst f nd the evidence and are uninformed as to how such data should be handled. Further, electronic evidence is likely to vanish more quickly than any paper evidence. ¶13,011 Auditor’s Job as Related to Computer Forensics A question that should be asked is: ‘‘Does computer forensics have anything to do with the auditor’s normal job functions?’’ Bigler states that auditors often have responsibilities for investigations of computer-based ‘‘frauds, harassment, theft, pornography, or deception committed by employees, contractors, vendors, customers or other third parties.’’ Sarbanes-Oxley’s Extensions. The primary purpose of the Sarbanes-Oxley Act is to help avoid the f nancial frauds of the last decade. The approach taken in the legislation is (1) to make management directly responsible for the integrity of the company’s f nancial statements and (2) to require a strengthening of internal control procedures. Added assurances need to be made regarding the level of information integrity, protection of f nancial records, accuracy of f nancial representations, and assertions that reporting systems are working as designed. Section 404 requires that these validations need to be performed by the external auditors. The PCAOB. The Public Company Accounting Oversight Board (PCAOB) was created by Sarbanes-Oxley legislation, and it was given authority over auditors’ attestation standards with the purpose of protecting investors from the recent f nancial fraud abuses. The PCAOB has taken over setting auditing standards for auditors from the Auditing Standards Board of the AICPA. The PCAOB, under an SEC approval process, is responsible for adopting auditing and practice rules over public accounting
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This note was uploaded on 01/12/2012 for the course ACCT 555 taught by Professor Briggs during the Spring '11 term at University of Texas at Dallas, Richardson.

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4Ed_CCH_Forensic_and_Investigative_Accounting_Solutions_13...

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