Blockchain can help make business networks less susceptible to fraud in three major features. First, due to its distributed nature, transaction data that is contained in Blockchains systems are shared across a peer-to-peer network and continually reconciled, thus management and authorization is spread across the network leaving no room for fraudulent actions to take place. Fake data, double purchases, even errors in approval, etc. are prevented within the linked blockchain process and network. Fraudulent data cannot be inserted into the blockchain. Moreover, all transactions and data are transparent to all authorized parties of the network so data can’t be falsified or manipulated. A good example of fraud preventing by Blockchain is the …show more content…
This may be one of the most important reasons the financial services industry is rapidly exploring and investing in Blockchain technology. Finally, access to both seeing and performing transactions is restricted only to related parties. Participants are issued cryptographic membership cards to represent their identity so that confidential data and information is protected leaving no room for outsiders to alter it. However, even authorized users can’t add to the Blockchain without consensus, and no one can tamper with records on the Blockchain without a way to hide their tracks, fraudsters have a much higher chance of getting caught before even committing fraud. Since blockchains will provide a live, indelible record of financial transactions, which leads to mitigating many of the manual data extraction and audit preparation tasks that are both time consuming and labor intensive and for an entity’s management and staff. Accountants will be able to execute real-time audits of banks’ capital and risk positions. Real-time auditing and reporting will liberate audit teams from certain routine tasks so that they can shift their efforts and concentrate on playing more creative roles and adding value to the firm by providing strategic advice, probably focusing on new ways to deliver future business value, rather than keeping track of past costs and undertaking basic bookkeeping
This seems to be a very pessimistic technique on the outside, but as I said before, any person can be a thief; an old lady, a religious man, or a student. Controlling from the inside, for example limiting cash, mandating dual signatures on business checks or accepting invoices reduce the opportunity for fraud to happen drastically. 7 Bigger enterprises have delicate areas such as “information security areas; video surveillance of sensitive areas, key control, clear employment policies, etcetera serve to limit temptation; the possibilities are limited only by the imagination and budget” (Larson, 1985).
The topic that I’m going to write about in this paper will be on the electronic currency released in 2009 known as Bitcoins. Bitcoins is a type of currency that entails computer software to be used with one person exchanging with another person for a different kind of trading option such as the US dollar, products or services. There is a fourth reason why Bitcoins can be exchanged which is done when a person is mining, that occurs when a participant acts as a mediator for transactions whereas mediator approves and documents. Bitcoins is one of the largest and first electronic currencies ever created by any developer including the makers Satoshi Nakamoto. Bitcoins doesn’t meet the characteristic guidelines to be considered an actual type of currency, though the US Treasury recognizes it as a type of decentralized currency in that no person or organization including governments oversees the transaction of Bitcoins.
Bitcoin is a form of digital currency that is similar to physical cash stored in a digital form. It is the first fully implemented cryptocurrency protocol utilizing an open source peer-to-peer payment system. As a transfer protocol, it fundamentally functions as a money transfer medium that sends bitcoins from user to user without the need of a third-party intermediary and the system is protected by peer-reviewed cryptographic algorithms. This cryptographic digital currency simultaneously provides users a method to exchange money for free or a nominal fee, which is mutually beneficial for retailers and consumers. The main concern is that it can be used for illegal activities such as the purchase of drugs, weapons and other illegal goods. Albeit true, the concern also exists with all other forms of regulated currency, such as cash and wire transfers. Anonymity is one of the greatest Bitcoin perks, however, nothing is as untraceable as cash. It is the solution to the leading economic and security issues that have left everyone vulnerable, particularly in the wake after the Target security breach in which hackers stole unencrypted credit card and debit card data for 40 million customers’ as well as their pins over the span of two weeks before it was detected. In addition, these hackers were also able to obtain the names, addresses, phone numbers, and email addresses of 70 million customers (Andreesen 6). If Bitcoin were to be used as the standard form of payment, the transaction data does not identify the purchaser’s identity and all information is encrypted. It is the most secure payment method and is a more secure future. Bitcoin is a technologically innovative soluti...
A Ponzi scheme is an investment fraud that involves the payment of returns to previous investors from funds paid by new investors.With little or no legal earnings, Ponzi schemes require a consistent flow of money from new investors to operate. Ponzi schemes tend to collapse when the operator is unable to recruit new investors ,when a large number of investors ask to cash out or if the operator disappears.These types of financial fraud have had a tremendous affect on the accounting profession, in the form of forensic accounting.
BY DOUG HENWOOD What’s being touted in some circles as the future of money looks hardly more peaceful than its past. Bitcoin, a formerly obscure cybercurrency, is now all over the headlines with reports of bankruptcies, thefts and FBI lockdowns. If our fate is to buy and sell bitcoins, this instability is troubling. But despite the headlines, the triumph of Bitcoin and related cyber-currencies is a lot less likely than recent commentary suggests.
As audit firms look to invest in big data, it will be even more critical to understand the implications of using big data and analytics on the audit profession. There are multiple ways in which data analytics would enhance the effectiveness and efficiency of external audits. From looking at the complete population, to finding trends, to allowing employees to do less routine tasks, there are multiple ways big data benefits audits. Big data would also enhance critical procedures performed for the sales and collection cycle. These benefits are not without some drawbacks that would need to be addressed by the profession.
Mercury Finance Company usually known as Mercury Finance was fundamentally a subprime lender whose corporate officers deliberately misquoted the organization's financial records. Mercury officials erroneously reported a 1996 benefit of more than $120 million rather than a loss of $30 million. Officials gave really false financial proclamations to more than 20 financial organizations, empowering Mercury to acquire more than $1.5 billion in advance duties and lines of credit. At the point when the fraud was found, Mercury's stock cost dropped fundamentally, costing shareholders almost $2 billion in market value. Furthermore, lenders lost over $40 million in credits stretched out to the organization.
Woda, K. (2006). Money laundering techniques with electronic payment systems. Information & Security International Journal, 18, 27–47.
To what extent will crypto-currencies affect the worlds economy? Introduction Firstly, an insight into crypto-currencies, what they are and how they can benefit the worlds economy. A crypto-currency is ‘digital medium of exchange’(RhettandLink) - managed through extensive encryption techniques known as cryptography. Comparable with fiat money, no group or individual can stunt, increase or abuse the production of crypto-currencies.
So, we can interpret that bitcoin will help to make future transactions smooth, efficient & more productive.
One of the largest parts of commerce is transaction. Transactions are needed anytime two parties exchange money or information. Since the Information Age has begun, transactions are more common over the Internet, where it is more imperative that transactions are secure (Klein x). Corporations have also become more widespread, which means that cryptography is needed to secu...
This system helps all of these banks provide financial secrecy which is that only you and your banker would legally be allowed to know the financial activity within your account. The financial secrecy, completely different from financial privacy, includes many regulations to maintain this asset of secrecy. For example, many banks would n...
Business today is inextricably intertwined with technology, from the smallest home office, to a multinational corporation with multiple monolithic legacy application. It is impossible to be in business today without confronting the issues of technology. The way we do business today is different than 30 years ago. Technology has evolved around the areas of telecommunication, travel, stock market, shipping even around our daily lives. E-commerce a system by which people can buy, sell and deal without even seeing the person on the other side has taken a front seat in improving the economy of countries around the world. Technology today has made it possible for monetary institutions to help locate the customers resources and help solve their problems at any given time through online banking. The Internet, a boon to all business, is playing a part of a catalyst; it links millions of customers to its suppliers and vice versa due to this, manufactures are able to cut the role of middlemen and are able to deal with the customers, giving them the ability for direct input from the customers about their choices and views of their product. The busi...
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.
The main function of AIS is to provide information derived from the financial transactions. The daily paper record, receipts and invoice, the electronic copies, any kinds of documents could be the source of the financial transaction. The piecemeal data is hard to trace and follow. The traditional accounting information system solves this problem. It collects the information, sorting and processing, making a record and then providing it to the users who are interested in it. However, with the development of technology, the function is being improved. Under the network environment, the accounting information system trends to base on internet to realize the financial information processed electronically and automatically. The emerging functions, such as cloud computing, shadow data, giving convenience to the users via mobile devices. The non-network AIS is no longer meeting the new requirements. In current business world, innovations and improvements are needed to satisfy the varieties requests of customers under the context of multi-cultural. Companies and organizations hope to use information to help planning and solving problems. In the pwc report, the new accounting information system needs efficiency, speed, and real time information to meet the definition of excellence. Given that this is an information era. These factors need the cooperation between IT and Accounting. The system creator according to the