Cloud Computing Team Members: Aleksandra Knezevic Willie Robbins Tom Potere Spring 2012-ACG6415 9/18/2018

Agenda What is cloud computing? Security Regulatory & Legal Concerns Essential Cloud Characteristics Types of Cloud Computing Drawbacks & Benefits Security Regulatory & Legal Concerns Security Mitigation Accounting & the Cloud Future Outlook Questions 9/18/2018

What is Cloud Computing? Cloud computing is an on-demand service that uses the Internet and central servers remotely to store and access information rather than locating data in a secure network facility. The service is obtained through third-party providers who offer flexible rates depending on the type and level of service. Cloud computing is an on-demand service that uses the Internet and central servers remotely to store and access information rather than locating data in a secure network facility. The service is obtained through third-party providers who offer flexible rates depending on the type and level of service. 9/18/2018

Essential Cloud Characteristics On-demand self service Rapid elasticity Broad network access Resource pooling Measured service On demand self services: computer services such as email, applications, network or server service can be provided without requiring human interaction with each service provider. Rapid elasticity: Cloud services can be rapidly and elastically provisioned to quickly scale out and rapidly released to quickly scale in. To the consumer, the capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time. Broad network access: Cloud Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms such as mobile phones, laptops and PDAs. Resource pooling: The provider’s computing resources are pooled together to serve multiple consumers using multiple-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. The resources include among others storage, processing, memory, network bandwidth, virtual machines and email services. The pooling together of the resource builds economies of scale (Gartner). Measured service: Cloud computing resource usage can be measured, controlled, and reported providing transparency for both the provider and consumer of the utilized service. Cloud computing services use a metering capability which enables to control and optimize resource use. The more you utilize the higher the bill. Just as utility companies sell power to subscribers, and telephone companies sell voice and data services, IT services such as network security management, data center hosting or even departmental billing can now be easily delivered as a contractual service. 9/18/2018

Types of Cloud Computing There exist three different types of cloud computing, as follows: Iaas (infrastructure as a service) - all the hardware, software, facilities, and expertise to make a virtual server is made available by the service provider; supports end-to-end software development life cycle; client has control over the deployed applications; e.g. Amazon EC2 Paas (platform as a service) - a set of tools for developers to build their own applications in the cloud; client has control over operating systems, storage, and deployed applications; e.g. Microsoft Azure SaaS (software as a service) - the service provider owns, hosts, and manages the software application and delivers it as a service to the customer; the client does not manage or control the underlying cloud infrastructure; e.g. Google Docs In addition, there are four different models for the delivery of cloud computing. Private clouds are used on an internal infrastructure for security-sensitive applications. Public clouds offer resources over the Internet through third-party service providers and can be used for less-sensitive applications. Hybrid clouds combine the benefits of both private and public cloud models. Finally, community clouds are similar to private clouds but are shared by several organizations that have common security and privacy concerns. App Engine Azure EngineYard Force.com Heroku Amazon GoGrid Linode Rackspace Google Apps Salesforce Taleo Workday 9/18/2018

Drawbacks & Benefits Drawbacks Benefits Convenient Data Security Pay for Access NO –IT Department Share Resources Convenient Reliability Issues Data Availability Data Security There are several benefits and some drawbacks of using cloud computing by CPA firms and their accounting clients. Pay for Access -Payment for the service is analogous to payment for the use of electricity; that is, a monthly bill based on usage NO-IT Department -There is also no requirement for funding or managing an IT department where manpower and maintenance is costly and equipment malfunctions and replacements are expected. Share Resources Another cost saving feature of cloud computing is the capability for users to share resources offered by service providers. This equates to real economies of scale and cost effectiveness for both the CPA firm and service providers, as well as the accounting client. Convenient - Since the cloud can be accessed anywhere with almost any computing device, the expense and time to travel to the client’s office for accounting and bookkeeping can be virtually eliminated. The cloud is faster and more reliable than servers. One of the main drawbacks concerns the paradigm shift required for CPA firms to switch company operations from in-house servers to cloud computing. Most people do not fully understand the risk associated with storing or transmitting confidential data in this shared environment. And businesses are much more wary than consumers about confidentiality and privacy concerns. Uncertainty about cloud availability is also a concern for CPA firms. Several well-publicized failures in 2009 highlight major problems for cloud users: Amazon lost service due to a lightening strike to the cloud. The cost-savings features of the cloud, such as relying on third-party providers for service and sharing resources with other users, also present the greatest security risks concerning the cloud’s use 9/18/2018

Security Regulatory & Legal Concerns Compliance Availability Integrity Identity & Access Management 3rd Party Provider Legal Risks 9/18/2018

Security Mitigation Encryption helps ensure confidentiality, integrity, and authenticity of data Certification of authority-helps gathers security credentials of all involved parties Digital certificates-work as digital passports 9/18/2018

Accounting & the Cloud Model Cloud-based accountant-centric model 9/18/2018

Accounting & the Cloud Advantages CPA firm can customize accounting solution Client can self-serve needs CPA becomes a virtual “CFO” for client Cloud is “great equalizer” for small CPA firms 9/18/2018

Audit Risks & Defenses Governance/ownership Data security policies Data protection Identity and access control Communications Service Level & contract management Regulatory compliance Vendor Management ………………………………….. Use Defense - In- Depth 9/18/2018

Historical Backup & Restoration (1) Expensive Hard Drives & Tapes (2) Complicated & Time-Consuming Procedures (3) Off-site storage, restoration of data (4) Back-ups not reliable 9/18/2018

Future Backup & Restoration Cloud Back- up (1) Daily Copies Securely Sent to Vendor (2) Checked for Integrity & Stored (3) Available for CPA & Client (4) Restored to CPA after Emergency 9/18/2018

Future Outlook More CPA firms are turning to cloud computing Cloud is flexible and cost-effective Offers greater security Client is better served More CPA firms are turning to cloud computing 9/18/2018

Questions 9/18/2018