Evaluating Financial Applications from an IT and Security Perspective

Technology is an integral part of any business. The rise of software has changed the way we evaluate security risks to safeguard company data. Acumatica understands the need to adapt to the constantly changing needs of companies and their customers. The software your company chooses should integrate with solutions that meet modern business needs, remain steadfast in their commitment to security and compliance, plus empower growth. That’s why Acumatica partners with products that are dedicated to security.

When it comes to lease accounting software, IT professionals need to seek financial applications that protect data while meeting all governmental regulations. Failing to comply properly with the new standards poses risks to your business. This article provides tips on how to evaluate software-as-a-service (SaaS) providers and reduce security risks.

Third-party security

When evaluating accounting SaaS vendors from an IT and security perspective, include third-party security. Use external sources to figure out if the financial application properly secures data and other important information, such as a SOC report or AUP engagement.

SOC report

A System Organization and Controls (SOC) 1 Type 2 report is a report on an entity’s internal controls over financial reporting for a specific period. The report provides an evaluation of the security of an application. It also serves as an audit of operating effectiveness from a financial perspective. A SOC report provides some assurance that the software is performing as expected.

Without a SOC report, it’s difficult to prove to auditors the software is secure and that proper internal controls are in place. When evaluating potential software for financial reporting, IT professionals need to obtain a letter stating what type of  SOC evaluation was performed and the results.

Agreed-upon procedures (AUP)

An agreed-upon procedures (AUP) engagement (AUP) is when an accounting firm is contracted to test or review predefined transactions or outputs of a third-party, such as a Saas provider. The resulting AUP report contains findings, but not conclusions from the engagement.

It gives companies the ability to evaluate the information and confirm the reliability of specific calculations or functions performed by the software. An AUP engagement adds an extra layer of security and assurance.

Intrinsic security

Intrinsic security means functionality directly incorporated into the technology product to protect data integrity. Security measures should be built into the foundation of the software product to better manage cybersecurity, such as password protection or data encryption.  Below are some of the intrinsic security features to look for:

Approval processes to prevent errors

The software you seek should have a two-step approval process for inputs and updates to ensure data is complete and accurate. Reviews and approvals are essential internal controls and will ensure the audit process runs more smoothly. Additionally, lease accounting software can provide a secure center for lease data so you can accurately track changes and prevent duplicates, unlike using spreadsheets such as Excel.

Password protection

The lease accounting solution chosen should require a user login. Password protection is essential for secure data. The chosen system administrator can allow access to other users, which helps create an audit trail.

Data encryption

Data security should be a top priority when choosing a financial application. Updated lease records and journal entries are key to complying with the new standards.  IT and cybersecurity teams need to choose a lease accounting software with proper data encryption.

Spreadsheets are less reliable

While it may be tempting to use a spreadsheet like Excel to track lease data, severe security risks are associated with manually logging data. Without security measures in place like password protection, auditors will have difficulty finding proof the data is secure and accurate.

Without data security, anyone can log into the spreadsheet and make changes to the information. Lease accounting software is the better option from an IT and security perspective.

Summary

Evaluating accounting software properly ensures data security and compliance with the new lease accounting standards. LeaseQuery has integrated its top accounting software solution with Acumatica. The integration between LeaseQuery and Acumatica simplifies lease accounting for users and provides proper security for lease data.