IT Risks and Controls in Cloud Based Systems. Research Paper

IT Risks and Controls in Cloud-Based Systems
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IT Risks and Controls in Cloud-Based Systems
The increased use of Information Technology in Accounting and financial processes in organizations have led to high levels of research and concerns about the risks and controls in cloud-based systems, especially Accounting Information Systems (AIS) (Teru & Hla, 2015). According to Bai, Nunez, & Kalagnanam (2012), the risks and vulnerabilities of AIS can result in misstatements in the organization's financial reporting. The availability of risks in AIS presents negative impacts n the accuracy, integrity, and validity of the financial reports (Bawaneh, 2014). In this context, the approach of risk and AIS control is significant to accounting processes coupled with IT audit and governance processes within the company. In nearly every organization, accounting systems contain classified data that needs to be kept secure at all times.
Studies show that unauthorised access can lead to identity theft problems and loss of valuable information (Liu, 2016). When one changes or deletes accounting data either knowingly or unknowingly, it creates mayhem in the department of finance and accounting, thus, raising questions about the accuracy and reliability of the company’s data (Lutui & Ahokovi, 2018). To deal with accounting risk caused by cloud-based systems, experts have recommended the use of internal controls of AIS, which serve as the security mechanisms to protect confidential data.
Examples of these controls include passwords and biometric identification systems. Mohammed, Al-Hosban, & Thnaibat (2018) stated that AIS must contain internal controls to not only prevent unauthorised computer access but also limit access to authorised users within the company. AIS should also contain internal controls that defend the systems from malicious agents, malware and other security threats (Teru & Hla, 2015).
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As previously stated, the internal controls in accounting cloud-based systems include the security mechanisms it uses to protect confidential information. These security measures include passwords and biometric identification. According to Bai, Nunez, & Kalagnanam (2012), AIS must contain internal controls to prevent unauthorised access and limit authorised access of the users within the company. Key components of an effective cloud-based system (AIS software) in the accounting department include quality, security and reliability. Managers depend on the information the system relays to make sound decisions for the organization. Bawaneh (2014) asserted that cloud-based systems could be customized to meet business needs. Liu (2016), on the other hand, argued that regardless of customization options selected by the business, Sarbanes-Oxley Act (SOX) will, to some extent, dictate the AIS structure for publicly-traded companies. It is because SOX has internal controls and accounting processes that are applicable to public companies.
Lutui & Ahokovi (2018) in their research, found that a cloud-based system in AIS requires internal controls that safeguard it...