The impact of cybersecurity on financial reporting: Strengthening data integrity and regulatory compliance

Cybersecurity plays a critical role in financial reporting by ensuring data integrity, confidentiality, and regulatory compliance. As financial institutions and corporations increasingly rely on digital systems for financial transactions and reporting, the risks associated with cyber threats have grown significantly. Cyberattacks, data breaches, and system vulnerabilities can compromise the accuracy and reliability of financial information, leading to severe financial, operational, and reputational consequences. This paper explores the impact of cybersecurity on financial reporting, emphasizing the need for robust security measures to protect sensitive financial data. Strengthening cybersecurity frameworks can help mitigate risks related to data manipulation, unauthorized access, and fraud, ensuring the reliability of financial statements. Organizations must implement proactive security strategies, including encryption, multi-factor authentication, real-time monitoring, and compliance with regulatory frameworks such as the Sarbanes-Oxley Act (SOX), General Data Protection Regulation (GDPR), and Securities and Exchange Commission (SEC) guidelines. The findings suggest that a proactive approach to cybersecurity not only protects financial data but also strengthens the overall integrity of financial reporting systems. This paper underscores the necessity for organizations to prioritize cybersecurity investments to enhance data accuracy, reduce financial risks, and uphold regulatory obligations in an increasingly digitalized financial landscape.