Due to increasing reports of fraudulent activity, the Australian Taxation Office (ATO) will be implementing a mandatory multi-factor authentication for some cloud accounting software users by the end of this year.
Software that lodges or contains superannuation and/or payroll data must mandate multi-factor authentication.
What is multi-factor authentication?
Multi-factor authentication such as two-factor authentication will add extra security to prevent fraudsters and hackers from accessing your systems’ data. With multi-factor authentication enabled, you will have to provide multiple pieces of information before anyone can have access to your data.
For example, if you try to log into a website/app with two-step authentication enabled, it would send a text message to your phone with a code that you would also have to enter on the website/app to be able to log in.
Another example of multi-factor authentication is a code that is presented on your app or through text that changes every thirty seconds. This will make it far more difficult for a hacker to steal both your password and code and trigger a breach.
While multi-factor authentication will make data more secure, it may become a bit of a nuisance for the busy user who wants data access fast. In addition, systemising multi-factor authentication in a business may require an employee’s personally sensitive information during setup. Further, if the device that receives the authentication code gets lost, damaged, forgotten, or not accessible for whatever reason, the process could include exasperating phone calls to the software vendor just to get access.
You may have already experienced multi-factor authentication on Xero who are ahead of the curve. Others in the accounting software industry are following suit. Should your accounting software advise that multi-factor authentication will become mandatory for you, you should start using it as soon as possible. This will ensure the data of your employees, clients, and business will not be compromised.
If you need assistance with business tax accounting and reliable business advice, contact a Chan & Naylor accountant near you, and we’ll be more than happy to help.
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