The importance of data security in accounting
June 25, 2015

Accountants work with a massive amount of data, and they need to take a more active role in protecting this information. Data breaches are on the rise across every type of organization, and lost data can be costly, whether it's internal information or client data. 

Employees pose the most significant threat to data within an organization although vulnerabilities are usually unintentional. Staff members may not realize they are making errors until a threat has already emerged. For instance, accounting fraud, such as an employee quoting numbers without any information to back it up, is often accidental. This could lead to misinformation, which is typically unintended. 

How firms can enhance data security
Data security is a top concern for small businesses because they often do not have the same protocols as larger organizations. Small companies need to guard their sensitive data and establish internal procedures, such as regulating employee access. Accountants should have access to only data that is relevant to their work to close potential security gaps. 

File sharing opens up opportunities for accounting fraud and other security risks. If clients request certain information, it needs to be delivered through a safe connection and encrypted whenever possible. Improper sharing accounts for a significant portion of data breaches. Employees may inadvertently share a file with someone who is not authorized to see it. Because not all emails are encrypted, it's easier for this data to fall into the wrong hands. Companies need to create policies on the types of information that can be shared and with whom. Setting these protocols helps employees have a better understanding of their role in data security.

Greater security concerns for some industries
Depending on the type of clients an industry serves, employees may have access to personal and financial information, which can be dangerous if it is intercepted by a hacker. Not even managers should have access to certain data sets if it isn't relevant to what they do. Lax security creates the potential for many problems, and firms need to do something about it. Increasing training and establishing stronger security policies makes a difference in prevention. 

Accountants who serve other organizations need to take the role of an advisor to provide insight on what can be done to avoid fraud and data breaches. 

Nexus: G-WEBCD5