Superfund Wholesale director Kris Kitto urged accountants to reconsider sending their clients’ private financial data offshore for admin work.
Mr Kitto said that while offshoring is legal, it can be significantly more complex compared to outsourcing to a business that stores all data locally.
“Despite the remarkable power of cloud technology, on the flip side data is potentially more vulnerable with a higher likelihood of security breaches,” Mr Kitto said.
Mr Kitto said while offshore outsourced providers will have their own data security policies, outsourcing overseas adds another layer of complexity to security, especially if a breach occurs.
Offshoring also brings with it significant reporting requirements to the Accounting Professional and Ethical Standards Board (APESB) and the Australian Securities and Investments Commission (ASIC).
APESB and ASIC require adequate disclosure of the activities you will outsource, the service provider, how you will monitor the provision of service, and who will do the monitoring and how often.