Keeping data safe is a key responsibility for everyone within a company—but perhaps especially in the financial organization, which deals with a company’s most sensitive data. Financial information in the wrong hands can, of course, financially harm a company and hurt its reputation. Data security in accounting is a regular, ongoing concern with risks that multiply as a company expands, systems change, and hackers get smarter.
Data protection best practices can keep your sensitive financial data as safe as possible, but know that security threats always exist and continue to increase. Here are some points to keep in mind:
Know who has access to your data. Access is a big issue, as anyone subject to SOX compliance knows. At the company level, there are individuals who have different levels of access to some applications and have different levels of permissions, depending on whether they can only view something or manipulate it. Outside of the company there are those who may need access but have roles that could change at any moment (i.e. contractors). And then you also want to consider your service providers (i.e. your cloud provider) and how much access they have to your data.
Educate your employees. Most data breaches are due to human error, and many of those errors can be tied back to employees or third parties working on behalf of the victim company. Employees need to be kept up to date not only on the company’s current protocols and technologies but what to do when they suspect something has happened—how do they communicate a potential problem (i.e., a phishy email or an outright obvious breach?), and what is the chain of command in processing that information? Periodic training on security awareness can help to keep the team vigilant and updated on the latest threats facing your company’s data.
Test out the systems you have in place to avoid data breaches. Some companies send out fake emails occasionally to see if employees will interact with them and whether the email recipients follow the company’s best practices for reporting the questionable messages. Other methods or systems your IT organization could use include proper backups of its information and exploring the reliability of those backups; regular encryption of sensitive data; firewalls; and anti-malware solutions.
Experiment with new technologies but always be vigilant. To be nimble and competitive, companies need to be efficient, but ways of being more efficient can come with their set of risks. Operating in the cloud, for instance, can be a much quicker way to keep information updated, but that’s also where breaches are known to occur (45% of breaches occurred in the cloud, according to a 2022 study data breaches by Ponemon Institute and IBM). While it makes sense to be open-minded to new technologies, it’s also wise to proceed with vigilance and to understand, from the perspective of finance and accounting experts who are in the field, how to proceed carefully, with eyes wide open.
Data Security in Accounting
Protecting the company’s financial information and ensuring the security of accounting data is a top challenge and it’s a must—not only for ethical and legal reasons, but also for protecting employees and customers. It’s an ongoing effort, with regular testing and evaluations, to ensure that the boundaries you have set up around your company will hold up and explore whether another solution needs to be explored.
Finance and accounting experts can help assess whether updates to your accounting data security are necessary, as they can bring a fresh perspective and their expertise working with hundreds of companies to explore any risks of a data breach along with your company’s internal control risks. For insights from internal audit experts and an understanding of some of the risks your company should be aware of today, see how RoseRyan consultants can help.
