Part 4: Accounting data security

Security

Is Accounting Data Security Reliable on the Cloud? While being cloud-based effectively protects your accounting data from natural disasters, your accounting platform still faces several financial security threats. People pose the biggest external and internal threats to your accounting system. Both are controllable based on your accounting system’s security features.

External threats are primarily cyber security attacks and data breaches that are constantly on the news. An example would be hackers trying to steal your financial information and/or that of your customers. A Verizon report shows 86% of data breaches were motivated by financial gain, which isn’t showing signs of slowing.

To prevent external data threats, choose a cyber-secure accounting solution with highly secure infrastructure and encryption to protect your data from hacking. Many accounting solutions are also equipped with basic security functions out-of-the-box, like closing accounting periods, passwords, and usernames. Features like these provide the first wall of defense against hackers, but it’s not enough. The problem with having only basic security features like these is that your internal staff, and anyone who breaks into your system, can still view data and do damage. Internal accounting security threats are the most overlooked. Around 60% of all cyber-attacks were conducted by employees with malintent. However, data security isn’t just threatened by malicious activity. About 40% of senior executives cited that internal accidental data sharing is a big security issue. Additionally, over 80% of breaches are attributed to human error. More concerning is that internal breaches and mistakes are usually more expensive than exterior attacks. Internal security features serve to control access to this data.

Your accounting software must provide internal control features that let you manage system access. These features work to prevent data corruption and theft from within your own organization while providing additional layers of protection against external threats. Here are a few examples of important internal control features you’ll want in your accounting system:

Two-factor authentication

Multi-factor authentication lets you enable a second level of authentication for every login. You can also implement this when a user is performing a specific function.

User permissions 

User permissions let you clearly define what tasks users can perform, approve, and access.

User role hierarchy

 Establishing a user hierarchy lets you dictate which specific user(s) can view or change specific components of accounts or records within the system, like reports.

Validation rules  

Validation rules establish standards for recording and handling data. Based on business logic, these rules prevent processes from being completed out of sequence.

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