Concepts: There was a variety of concepts used in this case. Security are policies and technical measures used to prevent unauthorized access, alternation, theft or physical damage to information systems. Controls are all methods, policies and procedures that ensure protection of the organization’s assets, accuracy and reliability of its records and operational adherance to management standards. General controls are overall controls that establish a framework for controlling the design, security and use of computer programs throughout an organization. Application controls are those which are unique to each computerized application. Data Security controls are those which ensure that data files on either disk or tape are not subject to unauthorized access, change or destruction. Administrative controls are formalized standards, rules, procedures and disciplines to ensure that the organization’s controls are properly executed and enforced. Online Transaction Processing is a transaction processing mode in which transactions entered online are immediately processed by the computer. Authentication gives each party in the transaction the ability to identify the other party. Effective Papers: February 2020 is the ability to ascertain that a transmitted message has not been copied or altered.
Digital Signature is a digital code that can be attached to an electronically transmitted message to uniquely identify its contents and sender. Digital Certificate is an attachment to an electronic message to verify the identity of the sender and to provide the receiver with the means to encode a reply. Risk Assessment is determining the potential frequency of the occurrence of a problem and the potential damage if the problem were to occur. It is also used to determine the cost/benefit of a control. Data Quality Audit is a survey or sample of files to determine accuracy and completeness of data in an informations system. Data Cleansing corrects errors and inconsistencies in data to increase accuracy so that they can be used in a standard company-wide format. MIS Audit identifies all the controls that govern individual information systems and assesses their effectiveness. Walkthrough is a review of specification or design document by a small group of people carefully selected based on the skills needed for the particular objectives being tested. Debugging is the process of discovering and eliminating the errors and defects in the program code.
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Discussion: On February, 2002, due to a lack of proper security measures and controls, Allied Irish and Allfirst suffered a (670) million dollar foreign exchange trading loss at the hands of a thirty-seven year old foreign exchange trader by the name of John Rusnak who was employed by Allfirst for (7) years. During Career Transitioner Resume , Rusnak made bad trading decisions with regard to the increase in the value of the Japanese Yen and instead of confessing his problem to management, he tried to cover it up by fraudent means, which consitsed of falsified option trades & fake confirmations and acting as a proprietary trader. He then tried to make up for his losses by selling deep currency options to raise quick cash. But this did not work out because the company had to pay the client when the options matured. In the end, it was confirmed that the losses may have been directly Rusnaks responsibilty but it was Allies’s fault because if the proper controls were in place, a situation of this magnitude would never have taken place.
There were major weaknesses at Allfirst and Allied Irish. Firstly, their employees in the Treasury department were inexperienced and they lacked the proper training and had poor supervision, which in any case would lead to laziness. In addition, Rusnak was allowed to trade while on vacation, which in itself is a direct violation of company policy. According to industry standards, when a trade is made it should always be accompanied by a hedge to guard against losses; however, there were no controls in place that ensured that these hedges were ever purchased. Thirdly, all traders have limits as to the amount of trades they can do at a given time, yet Rusnak was allowed to perform trades although he was well above his limit. Fourthly, there was no segmentation of duties between those of the front office, trading desk or back office. According to the case, there were many management, organization and technology factors that contributed to these weaknesses. For example, AIB had installed Opics in the back office at Allfirst, but did not install the its sister software called Tropics at it’s front office.
AIB was fully aware that these systems work hand in hand and in order for them to work effectively, they would have to ensure that both systems were in place. Also, AIB used Crossnar Matching Service, which automatically electrically confirms both sides of a trade in two minutes; but did not implement the system at Allfirst and as a result, they would have to call to validate a trade. This had a negative effect on them because if they had a trade with a bank in Japan they would have to call at either midnight or 1 am in order to speak with someone in their back office. Management is responsible for developing the control structure and quality standards for the organization. When they chose to look the other way instead of dealing with Rusnak when they were warned by Smith and others, they contributed indirectly to his fraudelent behavior. Also, when Rusnak realized that the Monte Carlo was inadequate, he told management but they turned him down for budgetary reasons. As with management, the characteristics of the organization play a large role in determining its approach to quality assurance and control issues. This article has been created by Essay Writers!
Concepts: There was a variety of concepts used in this case. Security are policies and technical measures used to prevent unauthorized access, alternation, theft or physical damage to information systems. Controls are all methods, policies and procedures that ensure protection of the organization’s assets, accuracy and reliability of its records and operational adherance to management standards. General controls are overall controls that establish a framework for controlling the design, security and use of computer programs throughout an organization. Application controls are those which are unique to each computerized application. Data Security controls are those which ensure that data files on either disk or tape are not subject to unauthorized access, change or destruction. Administrative controls are formalized standards, rules, procedures and disciplines to ensure that the organization’s controls are properly executed and enforced. Online Transaction Processing is a transaction processing mode in which transactions entered online are immediately processed by the computer. Authentication gives each party in the transaction the ability to identify the other party. Effective Papers: February 2020 is the ability to ascertain that a transmitted message has not been copied or altered.
Digital Signature is a digital code that can be attached to an electronically transmitted message to uniquely identify its contents and sender. Digital Certificate is an attachment to an electronic message to verify the identity of the sender and to provide the receiver with the means to encode a reply. Risk Assessment is determining the potential frequency of the occurrence of a problem and the potential damage if the problem were to occur. It is also used to determine the cost/benefit of a control. Data Quality Audit is a survey or sample of files to determine accuracy and completeness of data in an informations system. Data Cleansing corrects errors and inconsistencies in data to increase accuracy so that they can be used in a standard company-wide format. MIS Audit identifies all the controls that govern individual information systems and assesses their effectiveness. Walkthrough is a review of specification or design document by a small group of people carefully selected based on the skills needed for the particular objectives being tested. Debugging is the process of discovering and eliminating the errors and defects in the program code.
Hot Essays: June 2020 has been created with https://essayfreelancewriters.com.