Data Security and Controls in Computerised Accounting

Because a computerised accounting system stores a business's entire financial history electronically, protecting that data from loss, damage or misuse is just as important as recording it correctly in the first place. This is the practical, day-to-day side of the internal-control idea already introduced through the Accounting Information System in §4.

Common threats to accounting data include accidental deletion or overwriting of records by an untrained operator, hardware failure (a damaged hard disk), power interruptions during data entry, and unauthorised access by someone who should not be able to view or change a business's financial records — whether a curious outsider or an employee acting beyond their proper role.

Basic controls used to guard against these threats:

• Passwords and user-level access. Every person who uses the system is given their own login, and is allowed to see or change only the parts of the accounting data relevant to their own work — a sales clerk, for instance, need not be able to alter the master ledger. This both protects data and creates a record of who entered or changed what.
• Regular backups. A backup is a separate, safely stored copy of the accounting data, taken at regular intervals (daily or weekly, depending on how active the business is) and ideally kept in a different physical location from the main computer. If the working data is ever lost or damaged, the business can be restored from the most recent backup rather than losing its records altogether.
• Audit trail. Good accounting software keeps its own internal record of every entry made, and every later change to it, along with who made it and when — allowing an irregularity to be traced back to its source rather than remaining hidden inside the figures. …