Question

The impact of such frauds on the business firm, shareholders, society at large etc. Guidelines to constantly check the system and the parties involved in accounting like employees of accounting department, cash handling department, external auditors, etc. to prevent such frauds in the future. (Making sure to connect it all with managerial accounting practices).

Answer 1

Ethical confidentiality is keeping other person's or organisation's personal or sensitive information private and disclose such information only with the persons eligible to receive such information or under certain circumstances required by law. One of the most important elements of confidentiality is that it helps to build and develop trust. It potentially allows for the free flow of information between the client and worker.

Accounting personnel in an organisation have access to confidential information of company regarding employees, managememt and organisation. Keeping confidential information safe and secure is the responsibility of the personnel possesssing it. Leakage of sensitive information severe impact on organisation and personnel responsible for it. It leads to huge reputational damage of the organisation, losing of clients, Suits or penalties from clients. It is impossible to gain back trust from share holders or society.

Best practices to secure the confidential information.

• Limit business system and data access to appropriate users.
• Preparer and reviewer should be different in accounting department to control the activities.
• Issuer, user and reviewer of Cash shall be assigned to different persons which leads to transperancy and accountability.
• Adhere to security and privacy policies for email, Web browsing, and electronic communication which ensures the receipt of information by eligible persons.
• Determine approval hierarchies.
• Train employees to protect the data and to approach the concerned department in case further guidance.
• Address reported or suspected access and security violations.