When it is time to talk about the sensitivity of information that goes through payroll, between names, addresses, social security numbers, the dependent information.
Pretty much anything that you need to steal somebody’s identity is accessible in the details captured in payroll. For accountants, practitioners, even clients themselves, if you are taking on the high-risk responsibility of payroll data and preparation and if it's not in the cloud, you may not be providing the necessary level of protection.
According to Erron Stark, Division Vice President, Channel Sales at ADP , when it comes to protecting employee data “We’re seeing that come into play is because of the smaller nature of either the end client themselves or the accounting professional that's not necessarily thinking about that daily. They're typically the most subject to that type of fraud because they are going after and attacking the smaller practitioners not knowing that they're just sitting on a server in the back room and knowing that the information is gold for the people that, obtain it.”
In addition, Stark says “Why we're seeing that come into play is because of the smaller nature of either the end client themselves or the accounting professional that's not necessarily thinking about data security daily. They’re typically the most subject to that type of fraud because they are going after and attacking the smaller practitioners not knowing that their data is sitting on a server in the back room and knowing that the information is gold for the people that, obtain it.”
So how does a company like ADP protect that employee data? Stark explains that when it comes through the service that we use, we use mirrored servers across the country. The amount of encryption that goes into our software is the same level of encryption that the Pentagon uses, not to brag.
But the reality is that we are very sensitive to the information that clients entrust us with, accountants entrusts us with and even in the means of communication that we deliver to our clients and our clients are at the end of the day also the employees of those organizations were doing everything through secure portals as well. Our applications are online portals where they can access through W2s, things of that nature are extraordinarily important because today as an accountant, as a practitioner, even as a client, if I’m emailing things like quarterly reports or W2s, that information is on that too.
“It’s not just about what’s on your server, it’s the means and mediums in which you communicate that information is equally as important,” Stark says.
In the end, the payroll information each of us are obtaining on a regular basis has a high level of risk if we are not implementing the right internal controls including a secure online environment. Right now is a great time to assess your practice and your clients to make some decisions about potentially outsourcing your payroll in order to avoid the risk of a data breach, which frankly, may put you out of business.
Be sure to listen to The Weekly Fraudcast where Dawn discusses with industry leaders about how technology and internal controls can help minimize the risk of business fraud.
Next Week: Asset Misappropriation and Fraudulent Disbursements
Dawn is a Certified Public Accountant, Certified Fraud Examiner, and CEO of Powerful Accounting, LLC. Powerful Accounting is a nationally recognized accounting, tax, forensic and fraud, IRS and State Agency audit professionals as well as a QuickBooks consulting firm. Recently, Powerful Accounting has partnered with Anderson, Brolin & Coba...