Computerised accounting information systems are an integral part of our lives, especially as cloud based systems gain more popularity among accounting professionals as well as other businesses because of the convenience, speed and accuracy.
However, every single technology creates its own problems and new computer systems create their own cyber security risks, as well as professional issues.
Let's have a look at the immediate risks that the small businesses face these days:
1. BAD DATA
Current accounting software is designed to make data entry as easy as possible. And on top of that, they are heavily advertised by all means and are available to the ordinary members of the public, regardless of their lack of numerical skills. If the business owners do not hire the right person to do the job, they face risks of having inaccurate financial statements as well as reporting the wrong set of figures for tax compliance that can lead to harsh penalties from the Australian Taxation Office (ATO).
2. TOO MUCH CONVENIENCE
Again, current accounting software is designed to be convenient, too. The cloud-based systems enable users to log-in on any device they choose. If the device is secured by anti-virus software and used in a "safe environment," such as one's own office, away from the reach of the public, everything goes well. However, for the sake of convenience, if the user logs in to the system on an unsecured computer, such as an internet café or dodgy hotel Wi-Fi in an overseas holiday resort, the user IDs and passwords can be compromised. Software companies developed a two-factor login system to minimise that risk, as required by the ATO. However, even in that case, the risk is still there.
3. IS THE SOFTWARE SAFE?
The well-known brands always invest in the best safety features. However, there is free accounting software on the market that offer a reasonable service for nothing. We strongly recommend being selective when choosing the right software. Always leave the decision to your accountant and never go for the cheapest option. When taxpayers loose data in the hands of free software providers, financial remedies can be unbearable and compliance penalties can be significant.
This issue also applies to the sister apps that are integrated with your cloud accounting software to help you run the business. Cheap apps come with their own risks. Always check the reviews and base your decision on functionality and safety, but not on the price.
4. ARE YOU SAFE?
How many of us get numerous emails every day, asking to click on a link or hand over the bank account details for an overseas transfer that has been waiting to be paid, etc.? So, it is vitally important to protect our own systems before making the decision about which cloud system to use for accounting. If we don't have proper anti-virus software and if we don't refrain taking the risk of opening every single email and attachment, our records will not last long before changing hands towards the criminal community.
5. ARE THE EMPLOYEES RELIABLE?
Unfortunately, criminal intentions cannot be predicted based on an employee's face. The amount of real time data in accounting systems can easily turn into a profitable motive for a team member. On the black market, there is always a buyer for the passwords, tax file numbers, etc. So, it is really important to seek help from recruitment professionals that can put a proper process in place to check the history of the applicants and can also draft an employment contract that will emphasise confidentiality.
6. OUTSOURCING ACCOUNTING WORK
When you contact a new accountant or even with your existing accountant, you need to check their use of outsourcing, especially overseas-based cheap accounting support facilities and you should question their level of control over them. As a natural course of business, the outsourced accounting professionals have full access to clients' online files. This creates a risk for a breach of security.
7. PERSONAL RISK
That is the funniest type of risk in my opinion because I have seen clients, in my own public practice, who made payments to some "third-parties" from the business accounts which my staff and I saw immediately, despite the fact that the payments should have stayed a complete secret in their life.
I had to warn them nicely not to use that account again. So, do not let the cloud systems expose your double life to outsiders.
Briefly, cloud systems are perfect to carry us to the next level since they will work as the back bone for automation, supported by artificial intelligence. However, human nature will always stay the same. The crooks and criminals will keep searching for a gap to sneak in and make easy money. It is up to us to stop them from doing it.