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Technology Driven Accounting: How to Prepare Staff for a New Age in Accounting

CPA evolution. This is aimed at incorporating changing skills and competencies in the accounting field. As a result, this will include a new curriculum and new CPA exams expected to be launched in 2024.

Despite the disruption in the accounting field by technology, it has introduced many new opportunities. Consider this: while automation takes care of repetitive tasks, the accountant can devote more time to planning, organizing, and advising. This enables the accountant to add more value to an organization as they focus on major tasks.

However, this advantage will benefit only those who are well prepared in advance and ready for the new form that accounting is taking.

How to Prepare Your Staff for a New Age in Accounting

Change is not always welcome, but preparing your staff in advance will help ensure a smooth transition. Here is how to prepare your staff:

  • Communicate
    Let your employees know the intended changes in roles as well as new technologies that you plan to implement. Employees also can play a role in selecting technologies best suited to your business operations.
  • Mindset Shift
    Help employees accept the technological changes. They need to shift their mindset and accept the changing digital landscape. This will help with expediency and the ability to take advantage of its benefits.
  • Upskilling and Reskilling
    Give employees a chance to enhance their abilities. They also should learn new things to ensure they have relevant skills to continue working in advanced areas of accounting that require innovation, critical thinking, decision making, etc. Where necessary, they could learn basic programming and even basic automation for more advanced roles like data analysis. Gaining new skills will help your business transition from old systems to new ones, without necessarily hiring new staff.
  • Soft Skills
    Accountants now more than ever need to learn non-technical skills so that they can easily interact with people. If they are expected to take up advisory roles, they should be good at problem-solving, communication, relationship skills, business acumen, etc.
  • Emerging Business Models
    Let your staff be aware of new business models, such as microservices, marketplace platforms, and do-it-yourself models. This especially affects accounting firms whose employees need to be creative on how to leverage these models.
  • Positive Culture
    Develop a culture that enables staff to compete at a new level to keep their morale up so they are not worried about losing their jobs.
  • Stay Updated
    Keep everyone up-to-date with trends even when you don’t intend to implement every new technology that comes up. It helps to stay in the loop of what’s happening in the accounting field.

Keeping up with evolving accounting trends and changes will save you from losing clients. Preparing your staff for the new age of accounting will help your business provide value beyond traditional accounting to your clients. This is because you will be serving as business consultants and strategic partners as opposed to simply accounting experts.

Audits in Accounting: Improving Audit Quality with Data Analytics

AICPA introduced data standards to be used for data requests and to ensure production of standard reports from the ERP systems.

Another challenge is the integrity of data fed into the analytics systems, as this determines the quality of the end results. Systems used should be designed around collecting meaningful data. Auditors must also ensure that the conclusions fed into the systems are accurate and correct.  

Although data analytics reduces the sampling risk, it introduces the challenge of getting numerous exceptions, mostly referred to as outliers, that produce results outside audit expectations. This calls for auditors to investigate the exceptions/outliers to determine if they are errors or misstatements.

Conclusion

Integrating data analytics into the audit process greatly improves audit quality and credibility. With rapid advancements in technology, the capabilities of data analytics will continue to evolve, making auditing work even more efficient while maintaining high quality.

Although the adoption of data analytics is dependent on the size of a business, availability of skilled staff is also crucial. To remain relevant in a fast-changing environment, auditors need to advance their skills to effectively use the data analytics tools.

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Heightened Hacking as Corona Pandemic Worsens; How to Avoid Being a Victim

Hacking as Corona Pandemic Worsens, Avoid Being a Victim ScamSince the escalation of COVID-19 cases, malicious activity from cybercriminals is also on the rise.

Hackers are taking advantage of the coronavirus fear to carry out attacks. This is done by creating websites that claim to have cures for the virus or by spreading emails that contain links to malware.

Consider this research by Check Point, where they found an increase in coronavirus domain name registration. Most of these scam websites allege to be selling vaccines against the virus.

At the beginning of this year, one of the reported cases was the Emotet malware that was used in a coronavirus-themed campaign in Japan. Phishing victims received an email purporting to report locations where the infection was spreading. Because the email appeared to be an official communication from the government, victims were likely to open it to find out more about the information. However, an attempt to open a .docx document will download the Emotet malware to the victim’s computer.

Apart from a .docx, the attachment could be a .pdf or an .mp4 claiming to have instructions on how to protect against the virus or other related updates.

The case in Japan is among the first attacks on the public domain that came with the rise of the COVID-19. Since then as the coronavirus continued to spread, more data breach cases have been reported. According to Malwarebytes Labs director Jerome Segura, there is an increase in campaigns that use the coronavirus situation to trick victims. Segura reports that in March alone, there was a 26 percent increase in online credit card skimming as people did online shopping from the safety of their homes.

Even the World Health Organization has not been spared, as they recently reported a fivefold increase in cyberattacks. The attacks have increased such that there was a joint alert sent out by the United States Department of Homeland Security, the Cybersecurity and Infrastructure Security Agency, and the United Kingdom’s National Cyber Security Centre.

Unfortunately, the fact is it won’t get any better as more cybersecurity firms report an increase in attacks relating to the coronavirus outbreak. This is because attacks that are based on important events or occurrences such as the COVID-19 pandemic become effective as they leverage on the public’s need to know.

In matters of life and death, people tend to be less careful; and in an attempt to stay informed, they end up becoming victims of cybercriminals.

Apart from malware, there are fears that work-at-home directives also have led to an increase in data breaches. If you have a business, you probably have policies to help guard against cyberattacks. However, since the work-at-home situation was largely unplanned and employees are having to work from home, data can be easily leaked from the devices they use to connect to the office network.

It’s important to keep in mind that hackers love to take advantage of current events to trick their victims. Because of this, it’s expected that these attacks will increase in frequency – and this calls for users to be vigilant.

Although security systems might already be in place, none of them have the ability to deal with ever-increasing threats that have grown in sophistication. Email security remains one of the hardest challenges for employers. However, taking precautionary measures will help reduce the possibility of successful attacks.

Here are 10 ways to keep safe:

  1. Avoid clicking on promotional links in emails.
  2. Be careful when you receive emails with subject lines that include coronavirus or COVID-19 and have a call to action.
  3. Be careful when clicking on pages with special offers, especially pages claiming to sell or know about the cure for the coronavirus.
  4. Check domain names to verify their validity.
  5. Be careful about clicking on links found on SMS that claim to come from institutions such as your credit company or bank; such links could activate the malware.
  6. Make sure to use a virtual private network (VPN) – especially when working with sensitive data.
  7. If you have a business and your employees are using corporate devices, enable remote wipe in case devices to get compromised or lost.
  8. Limit the number of times you enter your credit card details online and confirm that the domain where you enter personal information is legitimate.
  9. Hackers will continue to adjust their tactics; therefore, use trusted resources such as the Centers for Disease Control and Prevention for information on the coronavirus.
  10. Use strong passwords.

Key Technology Trends in Accounting to Watch Out For in 2020

Technology advances continue to reshape industries and businesses – and the accounting industry is no exception. So far, a lot of repetitive tasks are performed with the help of advanced hardware and software. Even for businesses that do not like change, many find themselves making adjustments due to a generation change in the workforce, marketing demands, regulations and client demand. In any case, technology offers strengths once a business adopts new solutions to the accounting processes.

The accounting industry has evolved so much that bookkeeping is no longer just about balancing books; professionals in this field are slowly transitioning into strategic business advisors.

Technological innovations offer inexpensive and efficient ways to run businesses and other aspects of life. Every now and then, there is news on emerging technologies.

Here are some tech trends that are expected to influence the accounting industry in the year 2020.

Cloud-Based Accounting

The internet has enabled the storage and processing of data from remote servers. Small- and medium-sized businesses can now leverage the power of the internet and access data and infrastructure without worrying about the cost of purchasing and maintaining hardware and software services on-site. The ease of accessing data anytime and anywhere helps businesses save valuable time. Such benefits will continue driving more businesses to adopting the use of cloud-based accounting systems.  

Automation

Automating repetitive tasks has helped eliminate manual data entry while saving production hours at the same time. Since technology continues to advance, the accounting industry will see more tasks become automated. This trend can be observed in the growing number of accounting software available for both small and large businesses. Artificial intelligence will also contribute to automation in the industry. This is already evident with the increased development and adoption of robotic process automation.

Social Media

In the early 2000s, social media platforms were mainly used to communicate with family and friends. Today, social media is making an impact in digital marketing. Social media platforms will continue influencing how businesses communicate with their clients.

Apart from reaching out to more clients, accounting firms can also find talent to hire from social media platforms such as LinkedIn.

Big Data and Data Analytics

With advanced data collection and processing, it’s now possible to have access to insights and predictive analysis. Although analytics is not entirely new in accounting, the availability of data analytics tools makes it more powerful. This is important for business owners as it helps to improve decision making as well as understand the overall status of a company with the click of a button.

Cryptocurrency

This digital currency has revolutionized the financial industry with millions of coins present in the market today, including Bitcoin, Ripple and Ethereum among others. This digital currency has taken root so much that it is now accepted as a means of payment. Cryptocurrency has been enabled by blockchain technology.

Blockchain

For businesses, blockchain technology helps maintain a unique history of all interactions with various parties, which is indisputable. Widely known accounting companies like Ernst Young and Price Waterhouse already have people working in distributed ledger laboratories. The blockchain technology will not only lower the cost of reconciling and maintaining ledgers, but it will also provide accuracy of ownership and asset history. 

Remote Working

Remote work settings are becoming common in most industries, and accounting leaders are also adapting this trend. With expectations of more advanced computerized accounting systems as well as cloud-based solutions, it will not be a surprise to have your accountant handling accounting tasks remotely.

In Conclusion

With technology largely affecting how businesses are run, it’s no longer enough for a business to stick to traditional accountancy practices.

As technology and accounting becomes more intertwined, it’s wise for businesses to stay ahead of the curve. The most important way to deal with it is to embrace the technology, learn about new technologies and most importantly, learn new skills. This will ensure that your business remains competitive as you are ready to meet customer demands for faster processes. 

What is Splinternet and Why You Should Care

What is Splinternet and Why You Should CareEric Schmidt, former Google CEO, made a prediction in September 2018 that the internet will split in two – one part being led by China and the other by the United States. The reasoning behind this involves China’s active monitoring of all internet activities, as well as technological products and services from the country. Other reasons include a different leadership regime, controls and censorship.

Although it’s just speculation, the splinternet phenomenon has been around since the 1990s. Also known as cyber-balkanization, the concept is slowly taking root as governments seek to fence off their internet to create national internets.

How Realistic is Splinternet?

The United States has maintained dominance over the internet since its inception and going public. But in the modern digital landscape, rules and regulations are expected to curve the global internet into smaller networks. The idea is being driven by nationalism as well as concerns surrounding digital colonization and privacy issues.

China is one country known to be taking steps to compartmentalize the internet through its Great Firewall. Other countries that have taken steps to control domestic access to the internet include Russia and Iran. Europe is also taking steps toward reducing U.S. dominance by increasing regulations that require data localization. They have facilitates this with the 2018 introduction of General Data Protection Regulation (GDPR).

In the United States, there is a drive to increase internet fragmentation to reduce the domination of large companies. This is because of the need to increase personal data protection and reduce data control by large companies. With the world becoming more global, we continue to see cases of large companies like Facebook or Apple having more influence as well as centralized power.

Though a small fraction of the internet interactions, this provides a good example of the splintering. With such fragmentation of the internet increasing, it’s bound to have an effect on economic interests.

How a Split Internet Would Affect Businesses

Data has become a critical resource, from influencing purchasing decisions, behavior dynamics, health and other aspects. But with the changing internet landscape, businesses could be affected in one way or another. Businesses have had an easy time operating in a standardized web. But with the unity of the internet shattered, they would have to adjust their planning and metrics to fit into the new environment. For instance, due to China’s domestic internet control, it’s impossible for some companies in the United States to carry out business operations in China.

This situation presents a challenge for businesses – and especially those whose operations are purely internet based. Increased regulation means disruption of operations.

For small companies expanding to other countries, it would be difficult due to the overhead costs of compliance to various regional regulations. As a business, failing to comply with the laws of a different region would subject it to hefty fines.

Be Prepared

Whether this is going to be a reality or not, the fact is there are big changes happening on the internet. The days of an open internet are dwindling with different countries and companies erecting digital walls on the internet every other day.

Unless we have a new set of global rules that enhance openness and public interest, then businesses and consumers will have to navigate complex laws and regulations that will not only affect the economy, but also disrupt seamless communication.

Since data today plays a big role in the digital economy, businesses can’t afford to ignore the possibility of a splinternet. As a business owner, you need to stay steps ahead as it would be a challenge connecting with your customers when caught up in the changes.

Businesses need to know how to follow consumers to new environments – and this could mean a bigger budget is required for development and testing different markets. Given that technological changes happen gradually, it’s advisable to keep tabs on tech trends and adjust accordingly. 

How to Stay Safe with Business Email Compromise on the Rise

Email Compromise, hacked emailAccording to a report by the Financial Crimes Enforcement Network (FinCEN) released in July, financial institutions have incurred more than $9 billion in losses due to Business Email Compromise (BEC) schemes since 2016. With such staggering losses, businesses and even individuals can’t afford to ignore BEC attacks.

What is BEC?

BEC fraud involves cyber thieves posing as company executives or a business contact with the intention to commit wire transfer fraud or obtain sensitive information. The main targets are businesses working with foreign suppliers or a business that carries out regular wire-transfer payments.

To carry out this attack, criminals might pretend to be the company CEO and request that a junior staff member perform a task for them, such as transferring funds. Attackers take advantage of the fact that most organizations don’t have a set procedure to verify instructions received from the top management.

How Attackers Collect Data from their Targets

Cyber criminals use various techniques to carry out BEC fraud, with the main aim of stealing funds from the victims. The techniques used include:

  • Imposter techniques – this can be carried out in various ways. Attackers use a look-alike domain, display-name deception and spoofed emails that appear to come from legitimate addresses.
  • Social engineering – when a target has not set appropriate privacy settings on social media accounts, an attacker can easily collect information that will make their requests sound legitimate.
  • Malware – this enables attackers to have access to sensitive information that makes the fake request sound legitimate.
  • Mining from the Dark Web – here attackers can obtain stolen credentials.

How to Avoid BEC Attacks

It is difficult for conventional security systems to detect BEC schemes. Consider a case in which a transaction is initiated willingly by a legitimate user in response to a request from a legitimate source. Such an email has no payloads such as malicious attachments that can be blocked.

Here are some methods to help reduce the possibility of these attacks:

  • Raising awareness of common attack scenarios or tactics used by the cyber criminals, such as a false domain name that looks almost like the original one, impersonation of a vendor, false sense of urgency or a request for secrecy.
  • Training employees on cyber security risks and implications.
  • Implementing email authentication protocols like Domain-Based Message  Authentication, Reporting and Conformance (DMARC) and email authentication, such as DomainKeys Identified Mail (DKIM).
  • Using layered defense, such as encryption, and virtual private networks.
  • Implementing a multifactor authentication that will introduce a secondary authorization control. This will help stop attackers even when they have access to the target’s credentials.
  • Establishing communication protocols that will allow for a follow-up. For instance, if the person is requesting financial transactions, an employee should call to ascertain the request.
  • Scrutinizing all emails that request for fund transfer.
  • Monitoring incoming email, especially those that use VIP names.
  • Optimizing accounting systems and controls.

Final Thoughts

Apart from taking precautionary measures, businesses also should make sure that their insurance specifically covers BEC attacks, as courts might have different interpretations of policies. Consider the case of Apache Corporation, which lost $7million due to a BEC attack. The judge ruled that since the money was sent to pay a legitimate invoice to the wrong bank, it was not covered by their insurance policy.

Note that a majority of these criminals are from countries that might not have strict laws on cybercrime, making it difficult to have them prosecuted.

So, whether you run a small, medium or large business, or even a personal account, it’s vital that you take precautionary measures against the increasing BEC schemes.