IMPLICATIONS FOR THE

ACCOUNTING
PROFESSION
Implications for the Accounting
Profession
Privacy Violation
Audit Implications of XBRL
Continuous Auditing
Electronic Audit Trails
Confidentiality of Data
Authentication
Nonrepudiation
Data Integrity
Access Controls
Changing legal environment
 Implications for the Accounting
Profession
Privacy Violation
Privacy
level of confidentiality that are organization employs in
managing customer and trading partner data.
 Privacy Violations
Specific concerns:
Does the organization have a stated policy?
What mechanisms are in place to ensure the consistent
application of stated policies?
What information on customer, trading partners, and
visitors does the company capture?
Does the organization share or sell its customer, trading
partner, or visitor information?
Can individuals and business entities verify and update
the information capture about them?
 Privacy Violation
Safe Harbor Agreement (1995)
establishes standards for information transmittal between
the united States and European Union.
6 conditions:
Notice
Choice
Onward transfer
Security and Data Integrity
Access
Enforcement
 Privacy Violation
Notice
Organizations must provide individuals with clear
notice of:
the purposes for which it collects and uses information
about them
the types of third parties which it discloses the
information
how to contact the company with inquiries or
complaints
Choice
 Privacy Violation
Onward transfer
Organizations may share information only with those third
parties that belong to the Safe Harbor Agreement or follow its
principles
Security and Data Integrity
Organizations need to ensure that the data they maintain is
accurate, complete, and current and thus reliable for use
They must also ensure the security of the information.
 Privacy Violation
Access
Organization must give individuals:
Access to personal data about themselves
Provide an opportunity to correct, amend, or delete such data.
Enforcement
Organization must:
Enforce compliance
Provide recourse for individuals
Impose action on their employees and agents for non-compliance.
 Implications for the Accounting
Profession
Audit Implications of XBRL
Taxonomy Creation
incorrect taxonomy results in incorrect mapping that could
result in material misrepresentation of financial data.
Validation of Instance Documents
ensure that appropriate taxonomy and tags have been applied.
Audit Scope and Timeframe
impact on auditor responsibility as a consequence of real-time
distribution of financial statements.
 Implications for the Accounting
Profession
Continuous process auditing
auditors review transactions at frequent intervals or as
they occur
intelligent control agents: heuristics that search
electronic transactions for anomalies
Electronic audit trails
electronic transactions generated without human
intervention
no paper audit trail
 Implications for the Accounting
Profession
Confidentiality of data
open system designs allow mission-critical information to be
at the risk to intruders
Authentication
in e-commerce systems, determining the identity of the
customer is not a simple task
Nonrepudiation
repudiation can lead to uncollected revenues or legal action
use digital signatures and digital certificates
 Implications for the Accounting
Profession
Certification authority (CA) licensing
trusted 3rd party vouches for identity
Data integrity
determine whether data has been intercepted and altered
Access controls
prevent unauthorized access to data
Changing legal environment
provide client with estimate of legal exposure
 Open System Interface (OSI)
The International Standards Organization developed a
layered set of protocols called OSI.
The purpose of OSI is to provide standards by which
the products of different manufacturers can interface
with one another in a seamless interconnection at the
user level.
 The OSI Protocol

Layer 7 Application Layer 7 Application

Data
Manipulation Layer 6 Presentation
Layer 6 Presentation
Tasks Layer 5 Session SOFT
Layer 5 Session SOFT
WARE WARE
Layer 4 Transport Layer 4 Transport
Data Layer 3 Network
Layer 3 Network
Communications
Tasks Layer 2 Data Link
Layer 2 Data Link HARD HARD
WARE WARE
Layer 1 Physical Layer 1 Physical

Communications Channel
 Layer Functions
Physical Layer
The 1st and lowest level in the protocol
Defines standards for the physical interconnection of
devices to the electronic circuit.
 Layer Functions
Data Link Layer
Concerned with the transmissions of packets of data
from node to node based on the workstation address.
 Layer Functions
Network Layer
Deals with the routing and relaying of data to different
LANs to WANs based on the network address.
It describes how packet data are transformed between
networks with different architectures.
 Layer Functions
Transport Layer
The purpose is to ensure delivery of the entire file or
message across individual networks and multiple
networks, regardless of the number and type of dissimilar
devices involved.
Seeks the connection between users that best meets
the users needs for message packeting and multiplexing
messages.
 Layer Functions
Session Layer
A specific connection between two users or entities on
the network.
The purpose is to guarantee a correct and
synchronized connection.
 Layer Functions
Presentation Layer
Data in transit are often in a format that is very
different from what the users application requires.
It provides the rules for editing, formatting, converting,
and displaying data to the users system.
 Layer Functions
Application Layer
It provides the overall environment for the users
application to access the network.
It also provides common application services.