Table of Contents
Abstract
The advancement of modern technology has resulted in business organizations improving their security of financial and management data through various computer software applications. This report highlights the benefits of technology in maintaining data security. It has helped the firms in storing and protecting their data, transferring of data, maintaining integrity while encryption, ensuring compliance and attaining security to protect the information of business organizations. This report also highlights the limitations associated with securing financial and management data by the companies such as problems with firewalls, third party risk, costs, protection against advanced threats etc. The report also provides recommendations on how the companies shall overcome these challenges and benefit themselves from the technological advances in securing their data.
Introduction
According to Well, Schipper and Francis (2013), the advancement in technology has resulted in tremendous changes in the Accounting operations of all the organizations around the globe. The impact of globalization and the development of software applications have eased out the accounting activities of the accountants of the business organizations. They are able to perform accounting operations with the help of various computer applications and software. These software applications enable the accountants in tracking transactions, calculating taxes, creating financial reports, analyzing investments activities and categorizing the income and expenses of an organization. This report intends to conduct an analysis of the benefits and the limitations of the advancement in financial and managerial accounting data security and provide useful recommendations based on the findings (Weil, Schipper, & Francis, 2013).
Benefits of Modern Financial and Managerial Accounting Data Security
The advent of technology has resulted in the business organizations improving the efficiency of their operations and maximizing their productivity. Moreover, it has enabled the firms in improving the security of their financial data. The various benefits of technological advancement in accounting security are:
Storing and Protecting of Information- The organizations had to record their financial data in various sheets using pen and pencil in the previous days. Therefore, it was possible for them to maintain only a handful of records. The development of technology has resulted in creating electronic store systems that enable the companies to protect their information and access the data whenever required. According to Masli, Peters, Richardson and Sanchez (2010), the electronic systems, storing data of companies have helped the companies in keeping records of file that are vital for the business. Millions and billions of data can be stored in a single device and accessed whenever required by the companies. It enables the company to protect various information that might be beneficial for the company in the future. Moreover, it protects the business organizations from various unethical activities of the employees like attendance related issues and commitment towards their objectives. Moreover, the data stored in the systems can be protected with various passwords and only allow a limited number of users to access them (Masli, Peters, Richardson, & Sanchez, 2010).
Security- The security of the accounting information of a company is vital and mishandling of the data can lead to severe consequences for the business organization. According to Gubbi, Buyya, Marusic and Palaniswami (2013), the companies control the security of data of the company in a computerized program depending upon the quality and importance of the information. The information can be protected with the help of various identification methods or passwords limiting the access of confidential information. The failure to protect the data provides an opening for unauthorized personnel in accessing the financial information of the company, leading to serious issues for the business as it can be used for various malicious purposes which will eventually hurt the image of the company or its employees. To avoid problems associated with security, the organizations, with the help of technological specialists, develop security systems that enable them to protect their information from any unauthorized access. In addition, hackers are able to access the financial information by cracking the passwords of the companies. The advent in technology has also led to the introduction of firewalls which help the business organizations in protecting their data from hackers.
Secure transfer of data- Transfer of data is one of the most vital responsibilities of every business organization. The financial data is vulnerable to various risks during the process of transport. As opined by Gelinas, Dull and Wheeler (2011), an efficient encryption solution helps the firms in protecting the data even when they are in rest or in motion. Files and data shared with the cloud systems remain safe and secure throughout the transporting process and it enables the company from loss of data while transferring it from one device to another (Gelinas, Dull & Wheeler, 2011).
Maintaining Integrity through Encryption- According to Gelinas, Dull and Wheeler (2011), one of the biggest concern for the organizations is the security of data while encryption. Hackers not just try to steal data from the organization database, but they also intend on altering it by hacking the transfer process which results in data fraud for an organization. Therefore, data encryption enables the company in protecting the data from various alterations. Moreover, the recipients have the access to verify whether the data received by them is tampered with or not. However, as stated by Gelinas, Dull and Wheeler, even though it is one of the most vital concerns of business enterprises, many companies tend to overlook the alteration of data during the transfer process.
Ensuring Compliance- Data protection is one of the most essential responsibilities of every business organization. According to Gubbi, Buyya, Marusic and Palaniswami (2013), compliance is important, especially for IT departments as they have to deal with various legal and industry restrictions on the process of implementation of security of their data. The companies benefit themselves by complying with industry standards and protect their financial information from any unethical exposure.
Challenges of Modern Financial and Management Accounting Data Security
According to Ali, Khan and Vasilakos (2015), the advancement of technology and internet of things are changing the accounting process of the financial organizations all around the globe. However, there are various issues faced by accountants and financial organizations in an attempt to protect their data from unauthorized personnel. The challenges faced by modern business organizations in their process of securing their financial and management data are:
Issues with Security and Firewall- The passwords protecting the information of the companies are not very strong and can be cracked through numerous processes. Strong passwords even possess a considerable amount of risk and hackers can unlock the device to misuse data which can create severe issues for the company. According to Ali, Khan and Vasilakos (2015), passwords can even be cracked normally by conceiving a combination of characters until one of them succeed. Firewalls help the organizations in limiting the traffic on computer but it can cause various issues for the user like legitimating programs as unauthorized access and modifying settings of the device. This can affect and limit the performance of the device and ultimately affect the output of the business organization.
Costly and Time Consuming- The advancement in technology has resulted in many anti-virus and malware suites protecting the data from loss or viral attack from the internet. However, these suites consume a large amount of RAM and processing power of the system and can also come in conflict with other security related tools leading to issues in the device in which the data is stored. Moreover, the process of security checks on a regular basis is time consuming and affects the productivity of the organizations. The implementation of security software by the companies require an additional amount of cost which ultimately increases the cost of operations of the company (Ali, Khan, & Vasilakos, 2015).
Change in Technology- According to Hall (2012), with the rapid change in technology, the business organizations need to keep themselves updated with the security tools. This results in expenditure of the companies on a regular basis and affect their total operational costs. Moreover, if the companies do not upgrade their security solutions systems protecting the financial data, it might be prone to various threats which will affect the information.
Managing Third-Party Risk- According to Carlos Roca, Jose Garcia and Jose de la Vega, (2009), many organizations outsource their financial services in order to reduce the operational costs of the firm. This results in data sharing to a third party with gives rise to various cybersecurity challenges for the organization (Carlos Roca, Jose Garcia, & Jose de la Vega, 2009).
Emergence of Advanced Threats- As opined by Amoore (2011), the advancement of technology has resulted in the emergence of various malicious internet viruses affecting the financial information of the enterprises. These malwares are unknown and are capable of cracking codes of protected devices and information. The weaknesses within the security of the business organizations are identified by these malware and they are exploited creating severe consequences for the business (Amoore, 2011).
Recommendations
Financial organizations around the globe can benefit themselves with the advancement of modern technology by improving the security concerns related to their data. The companies need to install an anti-virus software in their device and keep the rest of the software patched with it in order to avoid any malware affecting their data. The passwords protecting the information shall be strong and shall be changed on a regular basis in order to avoid hacking or unethical exploitation. Moreover, the important data should be backed up in a safe and secure device so that they can be recovered in case of any loss. The data required for calculation of information shall be downloaded from legal websites in order to avoid third party risks.
Conclusion
The advent of modern technology has benefited the financial organizations in improving the security of their financial data. The new systems can store a large amount of data and protect it with the help of various passwords in order to avoid unauthorized access of the company’s information. Moreover, with the development of the latest technology, the data is secure while transporting from one device to another. The companies need to ensure compliance in order to protect the data during the encryption process. However, the passwords are easy to crack and firewalls might lead to issues in performance of the system. Technology is changing on a regular basis and the companies need to keep themselves updated on the latest advances which is costly and time consuming. The modern day business organizations need to address the challenges and benefit themselves through the technological advances to protect the financial and management data of their organization.
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