16 Nov Passwords
As QuickBooks becomes more widely used as a bookkeeping tool by small business owners, the concerns and issues raised by accounting professionals deserve some attention. Although the computer operating system itself may have passwords, the additional level of security of password protecting the data itself is usually prudent. Based on the experience of this author, the most common concern relates to the audit trail: the ability to change entries after they have been recorded. Using passwords in QuickBooks directly is required to reduce the likelihood of this happening. This issue is compounded for the accountant because there are no formal month (or year-end) closing procedures that must be followed. This is a double edged sword because it means that the data can be quickly and easily corrected when mistakes happen, but it can also be easily changed after the books have been reconciled, financial statements issued, and/or the tax returns have been filed. The password protection feature and related closing date helps to reduce the likelihood of such problems when used consistently. In addition, the 2002 version and higher of QuickBooks Premier also has several new reports to assist in finding such changes.
Each firm that is going to provide bookkeeping services will need to determine what the password procedures and protocol will be. For example, is the Admin password going to be the same for all clients, what about the user names?
Version 6.0 first offered enhancement in the password feature by permitting each person to be setup individually. The designation of the specific areas of the software that the user is allowed to work in, as well as limiting the activities a user can perform, offers improved flexibility by releasing certain functions to permit effective and efficient use of the program. The password feature within QuickBooks continues to serve several functions:
· Protection of prior period data from accidental changes by setting the closing date
· Restricted access to confidential information by creating individual user passwords
· Protection of data from changes by unauthorized users
· Tracking data entry of various users