Social media, a risky business?

social_media

The accounting industry faces many challenges today, many of those challenges center around security and the risk of unwanted disclosers of sensitive and confidential information.  As any good accountant would tell you we are entrusted with hundreds if not thousands of confidential financial documents on a daily basis. Honestly you wouldn’t believe the stuff I see, everything from medical records, divorce decrees, death certificates and other legal documents disclosing who gets what in an inheritance or business disagreement.  Just when you think you know someone, trust me follow the money and it might surprise you.  To summarize my point, the key to providing great client service is to provide a service that meets the mobile needs of your client while remaining easy to use, convenient and secure while also making your life a little easier.  Overall, social media is here to stay so deal with it! The best way to manage this emerging issue is to develop a plan to monitor, control and secure such data in order to mitigate the risk associated with it.  Sounds simple enough right? Now the hard part, what next?

Legal aspect

Ok, so now what can you disclose, what’s legal and can you define grey area?  Good question! The funny part is our regulators seem to be debating the same question.  In an attempt to fill the void, our laws and statutory regulations continue to evolve but they only seem to be creating more questions than answers.  A great example of how the industry is changing is a legal case involving Netflix.  Netflix stirred controversy with the SEC’s regulatory agency when CEO Reed Hastings disclosed on Facebook that “viewing on Netflix’s streaming service had exceeded 1 billion hours for the first time” in June 2013. (see Bloomberg article below)  This short and simple expression was immediately picked up and scrutinized by the SEC regulatory agency.   Who knew Netflix could be so controversial?  The end result was a social outcry and eventually the SEC reversed course and instead issued additional guidance letting companies use social media to communicate financial information, although limited.  Many investors were upset at this ruling as they were concerned about the additional risk shareholders would face with information disclosed in such a way.

For further information, check out a great article on the subject at: http://www.bloomberg.com/news/2013-04-11/netflix-lists-facebook-twitter-as-media-sources-for-disclosures.html

Public image

The next big issue facing accounting firms today is maintaining a great public image.  As I have been told again and again, what is said among others reflects upon the firm and impacts future growth.  I know last year our firm did a virtual sweep of the office and Googled several random employees to inspect their “social presence”.  Scary right, whew glad I passed that test!  The firm was simply trying to figure out how it wanted to expand and transform itself into a social super power but for the young staffers it was a real wake up call to remove any pictures of crazy all-nighters or weird off-color postings, not that I had any of course.

Maintenance

Bring in the storm troopers!  Ahh the IT guy (or girl) how could we live without them! They remind me of the old song from that movie, what was that… oh yea Ghost Busters.  Ok sing it with me, “who ya going to call when the world gets crazy”?  The IT guy that’s who!  Ok, kidding aside the security aspect of keeping millions of financial documents safe is actually quite a feat.  Not only does it require constant maintenance from the trusty tech people but it cuts deep into the budget as well. Having backups are essential for peace of mind and it is truly scary to think that one click could potentially wipe out a years’ worth of work.  That reminds me when was the last time you backed up your documents?

ghostbusters

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About The Social Accountant

The trials and tribulations of the modern day staff accountant

4 responses to “Social media, a risky business?”

  1. Jason Reilly says :

    Accounting and banking have a lot of differences – but a lot of the same regulatory requirements. Protecting the privacy and financial security of customers is a fundamental necessity in any communications channel. Violation of those protections can, and should, have stringent penalties.

    I like the fact that you pointed out the consequences of Netflix’s comment on Facebook. Yes, now Facebook and Twitter are considered public access and it is up to the individual to follow, But it wasn’t always so. And what if a new channel opens up that isn’t so easy to get in? Should Netflix comment on their? What about investors who don’t have access?

    These are serious questions that need to be addressed.

  2. jharms564 says :

    Are there maybe industries that should not be social at all? It never occurred to me that the risks are almost outweighing the benefits. If you listen to social media experts then they tell you that any industry has to be active in social media. Social media is about engagement and talking to each other.If there are so many things that cannot be talked about then how lively can that conversation be? It is going to be interesting to see how social media finds its place in those industries like accounting, legal, health and banking.

  3. jraccounting says :

    The advent of social media has hit accounting much like it has hit the education and the healthcare industries – both of which are confined by legislation and law protecting student/patient confidential information through the auspices of legislation including FERPA and HIPAA. The need to maximize the use of social media and manage the venture into it by the accountant will either be controlled from the outset or imposed by outside entities. The author is right in the beginning of the article when he/she states that any planned integration of social media and an accountant or accounting firm should include a system to ‘monitor, control and secure such data in order to mitigate the risk associated with it’ – failing to do so is potentially disastrous.

    One of the things the accounting profession has to continue to define is appropriate use and the intended audience for its use of social media. This article talks about the maintenance of public image as one of the ways in which social media can benefit the accounting firm. Another use for social media and accounting might be by utilizing the social media networks to establish new leads and generating additional business with existing clients.

    Regardless, the use of social media by accounting professionals will be defined either by a series of controlled approaches or mandated by the profession through a reaction to negative press – the accountant and the profession gets to decide which road it takes.

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