Cybersecurity has become a necessary practice for businesses across industries, especially the accounting industry. As the rate of cyberattacks grows, hackers know vulnerable systems that contain important financial information can become easy targets. Accounting cybersecurity practices ensure that your firm protects sensitive data, not only for the compliance of your firm but for the safety of your clients who’ve entrusted you with their financial, personal, and professional information.
The importance of proactive accounting cybersecurity
The risks of not proactively addressing accounting cybersecurity vulnerabilities are significant. Without robust protections, accounting firms risk the loss of revenue, clients, and reputation. A cyberattack can mean a significant loss of time while systems are held for ransom, and the costly expenses of notifying clients, analyzing the attack, remediating the business, and paying for monitoring.
The top accounting firm cybersecurity risks
For accounting firms, the risks are considerable when it comes to cybersecurity. Here are a few of the reasons why CPA firms and cybersecurity are a hot topic.
Client Risk
Accounting firms must guarantee the safety of the information that clients entrust to their care. From Social Security numbers to financials, accounting firms hold some of the most important information for individuals and businesses. If firms cannot keep this information protected, the consequences are significant. Accounting firms have a duty to protect this information at all costs.
Financial Risk
The financial consequences of a cyberattack are considerable. According to the 2020 Cost of a Data Breach Report, conducted by the Ponemon Institute, the average cost of a data breach in the United States is $8.6 million. Customer personally identifiable information (PII) has an average cost of $150 per record per breach, it takes an average of 280 days for most breaches to be detected
Accounting firm cybersecurity best practices
Backups
You need to have a plan to back up your data, operating systems, and applications. This is extremely important not only in the event of a cyberattack but also if there was a cut off to access in physical locations or damaged servers.
Passwords and authentication
Your accounting firm should have stringent password policies in place. Employees should change passwords regularly and require strong passwords that include numbers, special characters.
Encryption
Encryption ensures that client data is protected. Accounting firms focus on encryption for data that is in transit, such as using encrypted email systems
