Companies Should not be Held Liable for Losses Sustained in a Successful Attack Made on Their AIS by Outside Sources. ACCT451
I argue against the statement" Companies should not be held liable for losses sustained in a successful attack made on their AIS by outside sources." There are several reasons for my contention. The Accounting Information Systems has been used by businesses to improve their recording, processing, and reporting of accounting information. At the same time it is the responsibility of the companies to adequately protect their information systems from outside sources. Since, the company benefits and consequently profits from the use of accounting information system, it should bear the losses that arise from attacks on the accounting information system. The argument in favor of the contention is that the accounting information system not only processes financial transactions to provide internal reports to managers but also does external reporting to outside parties such as stockowners, government and lenders. Since, it is essential that the accounting information system should be accessed by outsiders the system is particularly vulnerable to outside attacks (1). Still the onus of the security of its accounting information system clearly lies with the company and not with anyone else. It is a part of the business risk of a company. Consider the following example, a company maintains five distribution centers throughout the country. Each of these distribution centers may be attacked by robbers and looted. Who bears the loss? It is part of the business risk. The company cannot refuse to bear the losses. Similarly, if a company truck carrying goods to or from the company premises is attacked by robbers and is plundered, the company is responsible for the loss. It is another matter that the company may take out an insurance and the insurance company makes good the losses. However, the fact remains that the company pays premium for...
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