Choosing an accountant who is a technophobe is risky

Over the last two years, the compliance requirements placed on businesses have increased dramatically. Making sure your tax returns and PAYE and UIF payments are in on time are no longer sufficient.

Chris Welham, director of IT managed service provider, Space Age Technologies, suggests five questions small business owners should be asking their accounting firms to see if they cut the mustard.

Security is so often overlooked by the SME market. Our reliance on the Internet and our levels of comfort in buying online has meant we have become complacent about our personal data and who has access to it. The fact is, as a company, you have a responsibility to protect your client's data. Your accounting company and your auditors come into your offices and access your - and your clients' data - and often leave with that data on their laptops. They also send emails back to their own offices and these may well not be encrypted, exposing information to the broader Internet community. As a minimum requirement, your accounting firm should be able to answer these three questions:

• What does your firm do to safeguard the privacy and security of our company's data that is captured and copied on your auditor's laptops?
  
• What if these laptops are lost or stolen - what is the guarantee that our data will not fall into the wrong hands?
  
• How can we communicate securely with our accounting firm with the knowledge that our confidential company information cannot be intercepted, or if it is, that no one will be able to read it?

Space Age Technologies has been called in to a number of companies who believe that by running backups to a second server or an external hard drive from time to time is sufficient to protect the integrity of their data. These devices are, more often than not, on the same premises as the primary storage device or server. Your accounting company should be able to answer the following:

• Are regular and effective backups being made of all data that pertains to my business? This would include data such as that which is collected as part of an audit, any information supplied from time to time to the firm, such as monthly accounting data, information pertaining to the financial year-end reports, or any other information stored by the firm.
  
• Is this data secure and is there an offsite copy of this data?

For the first time, the King III Report has an entire chapter dedicated to IT compliance. The requirements are far more onerous than those suggested in the King II Report and non-compliance can have severe consequences for management - no matter what the size of the organisation. The following questions will help you assess your accounting firm's level of compliance:

• Is the accounting firm aware of the chapter in the King III Report on IT Governance?
  
• Are there people at the firm who are able to advise me of the implications of the governance requirements of the King III Report and possibly help me understand what would be needed for me to comply?
  
• Does the accounting firm itself comply with the requirements of the King III Report, particularly with respect to IT Governance, and if not, is there a plan to comply within a known time frame?

Victorious leaders through the ages have pointed out that the reason for much of their success has had more to do with who they have supporting them than with their own ability. Successful businesses have always chosen to partner with successful service providers. Your accounting firm should have a firm grasp on technology. While I would never recommend you choose your accountant based on their twitter profile, there is no excuse for a professional not understanding the tech basics of modern business. Here are a couple of things to consider:

• What IT technologies are in place at the accounting firm, and how up to date are they with advances in technology?
  
• Does the IT solution in place enable the clerks and auditors to collaborate efficiently while out of the office?
  
• Will you be able to communicate with your accountants via the channel of your choice? For instance, will you be able to Skype them when you are away and can you send large files safely and securely over the Internet should you need to?

Finally, it doesn't make an ounce of difference how techno-savvy your accountants may be, or if they all work on iPads. What you really need is to be sure they have the correct policies and procedures in place to ensure your company is protected. At the very least, they should be able to supply you with assurance about the following:

• What policies and procedures are in place (supported by technology) to act on, or remind me to make sure that important dates are not missed? These will include submission deadlines, report dates, payments of VAT, PAYE, UIF, skills levies and equity submissions.

The more technology progresses, the more the global authorities are seeing the benefits of using standardised reporting methodology, supported by technologies that facilitate this. Very soon, you will be hearing about International Financial Reporting Standards which is already mandatory for listed companies. This method of reporting will require the use of XBRL, a business reporting language which is being used all over the world. IT companies which play in the financial sector need to understand the implications of this. And while this may not affect you right away, having an accountant who understands the long-term implications of new technologies like these will mean your company will be compliant in time and that you will have done all you need to protect your business - and yourself as an owner or director.

Space Age Technologies is an IT services and platform integration specialist and Microsoft Gold Certified Partner. During its 16 years of existence, the company has become known for its pioneering role in the design of the first 24x7 remote monitoring and operations management service for the small and medium business. For more information go to www.spaceage.co.za.