Thursday, August 20, 2009

Leaks: Not Just a Problem for Your Car

Michael Cohn of WebCPA points out that the recent theft of over 130 million credit and debit card numbers should make accountants aware that identity theft not only involving themselves but clients as well is a very legitimate concern. Some of the techniques used to make computer use more convenient and less location-specific, such as wire transfers and "cloud-based" computin, unfortunately produces a concurrent increase in computer fraud risk. The Federal Trade Commission has deferred a "Red Flags Rule" requiring that businesses (including CPA firms) implement a written plan to protect computerized identity information, but this deferral is about to come to an end. While the AICPA is requesting another deferral, the legal ramifications of shoddy computer security should be enough to motivate businesses to ramp up computer security measures.

Clearly, expectations of customers regarding computer security have grown to the point where businesses with even limited levels of e-commerce are now expected to take identity protection very seriously. Regarding the "how-tos," I defer to more computer and fraud-savvy bloggers such as Tracy Coenen, Greg LaFollette and Brian Tankersley.


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