The Importance of Security and Privacy for Your Accounting Data

Rahul Maingi

By Rahul Maingi, Oct 25, 2019

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In any business, information is of the utmost importance. Company policies, client information and financial transactions are collectively termed as “data”. Talking about financial transactions, there are various accounting data that need to be stored and kept confidential. In this post we will discuss the significance of protecting your accounting data against cybercrime. Find out how you can secure your data with the use of different robust technologies.

What Is Data Security?

Simply put, data security, system data security, information security or computer security is the way to protect your most important business assets against unauthorized access. And despite what you may believe, it is not just about using the right data security products. In fact, data security combines people and processes with technology to provide better protection throughout the data’s lifecycle. This process includes tokenization, data encryption and key management practices.

Core Elements of Data Security

Confidentiality, integrity and availability – also known as the CIA triad – are the core elements of data protection. The CIA triad is the standard security model for all institutions to follow when it comes to protecting sensitive data.

Confidentiality: This element makes sure that only authorized personnel has access to the data.

Integrity: This ensures that all the information available is accurate and reliable.

Availability: The data is made available and accessible for any business requirements through this element.

Origin of Data Security Threats

Most data breaches are avoidable. Did you know that about 91% of data breaches in the first half of 2015 could have been easily prevented? This was disclosed by the Online Trust Alliance (OTA). However, they do happen, and here’s why:

  1. External Intrusion:

This is the most primary concept of hacking, where a hacker externally gains access to a system. This can happen through obtaining user credentials or hacking personal devices connected to the network and finding loopholes in the app security.

  1. Employees:

According to the 2015 Data Breach Investigations Report by Verizon, about 50% of all security breaches happened thanks to people inside the organization. And while about 30% of incidents were the result of negligence, roughly 20% were due to insider misuse, where the employee was the culprit. This may be due to financial problems, them feeling unhappy inside the company or planning to leave.

  1. Stolen Devices and Documents

Lost or stolen devices that contain confidential data could cause a security breach. This can happen due to an accident or maybe a planned attack by hackers. This risk increases as more and more employees bring their personal devices to the office. It often begins as an attack on a small group of people and later causes a bigger issue.

  1. Social Engineering and Fraud

This is another very popular method of data breach. Social engineering consists of fooling someone into giving their confidential credentials and then using that as a login to gain access to a system.

Current Scenario of Data Protection in Canada:  Impact of GDPR

Canada has always been a frontrunner when it comes to data protection, thanks to the Personal Information Protection and Electronic Documents Act (PIPEDA). However, after the EU General Data Protection Regulation (GDPR) with effect from May 25, 2018, the scenario impacted Canada as well. Canada has always maintained good relations with the EU, and after the implementation of the GDPR, the rules apply to all EEA countries and any other organization or individuals trading with them. In terms of global data privacy, this is perhaps the biggest law ever implemented.

Canada has been enjoying a partial ‘adequacy’ designation so far regarding any data transfer from the EU to Canada, and the changes due to the GDPR may take time to completely fall into place. In fact, PIPEDA has received the stamp of approval from the European Commission (EU) itself.

Accounting or bookkeeping firms process two types of data in general:

  1. Client data
  2. Client data is the data your business receives from clients regarding professional engagement and practice.

  3. Firm data

Firm data is the data a firm holds regarding its own management and employees, and consists of the marketing database.

Does the implementation of the GDPR alter this? Absolutely not. In fact, according to the Privacy Impact Assessment, the definition of “processing” remains unchanged.

Data Security Considerations

Before we get into the nitty-gritty of data protection, here is what you need to consider:

  • The Location of Your Sensitive Data

Unless you know where your data is located, providing proper protection is not possible.

  • Authorized Access to Your Data

Unchecked access by users can put your organization’s data at risk of being abused, stolen or misused. Therefore, you need to keep track of everyone who has access to your company’s data.

  • Monitoring and Real-Time Alert

Constant monitoring and real-time alerts are the two most important considerations you need to make when opting for data protection. In this way you can identify any unusual file activity or suspicious computer activity and prevent it in the future.

Data Security Technologies

Here is a list of data security technologies that can reduce the risk of data breaches:

  1. Data Auditing

Unless you want to wait for your data to be breached, take security protocols seriously. Hire an outside firm to annually review your systems. Making your clients aware that you are going to do this adds extra value to your client relationships.

  1. Data Real Time Alert

Observing all data activity and behaviour in real time lets you discover security breaches faster.

  1. Client Awareness Regarding Email-Security

If your clients email their financial information, make sure they know the risk of sending such sensitive data. E-mails stop at several locations or servers before reaching your inbox, and without encryption hackers can easily access it.

  1. Secured Wi-Fi

A secured Wi-Fi network with strong passwords and encryption protocols is the best way to keep your guest networks separated from internal ones. This is an easy and smart way to prevent data breaches.

  1. Prohibiting Client Data from Personal Devices

When employees use their personal devices to manage client information, it can lead to a huge security issue. You can always implement policies to reduce security vulnerabilities, but it is better to only ever access client data from your firm’s devices.

As digital technology alters our economy and society, our ways of accessing information, working and connecting is changing as well. Therefore, securing your information will play a major role in your business. Along with your own data protection strategies, encourage clients to actively participate in monitoring their data security to prevent as well as to find evidence of data theft and breach of privacy.

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