I did some checking up on your questions and like what everyone here knows yes it is possible, the question I would pose to you is what is your intent. You ask the question posing as a sys admin. As if we haven't heard that one before, I would have to ask you how long have you worked with Unix? I love the OS myself, there are some great sites out there that will help you to secure your proxy even better than what you thought it capable as for Squid.

If you are the one trying to cover your tracks Squid is a tough one. If you don't think so check it out
here. If you do have a guy you think is getting out There are a lot more tools available to you than just a proxy. As were mentioned before, physical security as well as filtering, etc...

Hope this helps, if not you're probably not looking for the bad guy.