HOW TO MANAGE PRIVACY RISK IN CLOUD ACCOUNTING

There is no doubt that cloud accounting has begun to find its way into the heart of many board members of corporations. This embracement of outsourcing a company’s accounting services to vendors has brought considerable privacy risks with it that needs to be dealt with if a company is to survive.

I am not going to go into details of how privacy risk that is associated with cloud accounting can affect a company. However, there are two things that would definitely happen to a company whose accounting data has been exposed.

One of such things is that the company would lose credibility in the eyes of all, thereby leading to increase in reputation risk. Another thing that would happen is that the competitors would gain insight into the company’s strategy that is contained in the financial statements of the business.

TIPS TO REDUCE CLOUD ACCOUNTING PRIVACY RISK

The first step in reducing the risk of cloud accounting is identifying and establishing the risks that face a company in the cloud. You can make reference to the European Network and Information Security Agency (ENISA), Cloud Security Alliance (CSA) or Open Web Application System Project (OWASP) for lists of possible things that can go wrong in the cloud.

After identifying the possible loopholes in the system, compliance with PCI DSS is a tested and trusted practice that has helped to ensure that accounting and other business information that are kept in the cloud are not compromised. PCI DSS stands for Payment Card Industry Data Security Standard. It is a framework of information security governance and best practices.

One of the major recommendations of PCI DSS in relation to protecting information including cloud accounting information is that the networks be protected from end to end. What this means is that subscribers to cloud accounting services should have a secured network of transporting data to and from the cloud.

Training and educating your employees that have access to your online accounting information is another way of reducing the risk of exposing your company’s financial details that is based on the cloud. Depending on other factors, other subscribers to the cloud accounting vendor that an entity uses can access the information kept on the server from anywhere in the world.

This means that anybody from anywhere can have real-time access to vital and sensitive business intelligence information that is kept in the cloud. In as much as many web services providers have the facility of choosing locations where you can access your services from, training and educating your workforce on the basics of information security is still one of the highly recommended information security best practices.

Another way of ensuring the safety of your cloud accounting data is to implement quarterly scan of your all enablers in the whole of process of managing your business data. This includes reviewing the network and other parameters scan report of your providers. You should have no business dealing with a cloud computing vendor that does not comply with requirement of scanning system regularly for possible vulnerabilities and treats.

Apart from the above points that have been discussed, there are five basic tenets of cloud security that management must adhere to in order to safeguard the reputation of the company that has been entrusted to them by the shareholders. Those five rules of thumbs are:

  • Management having an oversight of what cloud accounting entails
  • Board members being willing to assume responsibility of the risk that comes with cloud accounting
  • Management must have a concise dashboard of those that uses the cloud accounting resource
  • Authorization of what goes to the cloud must be given by management
  • Appropriate investment in training staff members that would be given access to the information that is stored in the space

Awareness of the above points coupled with good governance practice will place management in a better position of ensuring that the four pillars (Organization, People, Technology, and Process) as identified by ISACA in its business model for information security are robustly connected in such a way that risks are reduced to the minimal.

 

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