In: Accounting
Explain the most important risks in computer-based accounting systems. What controls can be implemented in each area to help mitigate these risks?
Part 1 - Risk of Using Computer Based Accounting System
a) Integrity and confidentiality - Data information can be hacked by any third party from Internal or external sources resulting in compromising in the integrity of data and it can result into leakage of data to thirs parties damaging the credibility of company
b) Accuracy - computer based accounting packages relate to only software language and hence in case of any single mistake which is not detected then such mistake becomed repetitive for such types of input.
c) Backup - Lack of backup is biggest issue for using such softwares. Backup is very important on daily basis. Without backup, data will be at risk if any disaster is identified.
d) Virus - Virus protection is also very important for such softwares. Since a virus can infect the whole computer resulting n manipulation, deletion, duplication, damage to data.
Part 2 - Controls to be implemented to mitigate such risks
a) for Integrity and confidentiality, An effective authentication required for accessing the data. A password can be created for each user and hence any wrong attempt can intimate the registered user and any wrong ful change can be identified
b) Accuracy - Software should be fully upgraded with all technical support so that any mistake can be identified easily.
C) For backup, whole data should be backup. Backup can be cloudbased or hardware based. Such backup will be very useful in case of disaster recovery plan.
d) An effective antivirus system should be purchased so that any virus like trojan, worm can be deleted and and Proper timely scanning should be done