10 Ways to Protect Your Accounting Firm’s Cybersecurity

In today’s digital world, cybersecurity is essential for any business, especially for accounting firms. With vast amounts of sensitive financial data, accountants are prime targets for cybercriminals looking to exploit valuable information. If your firm isn’t prioritizing cybersecurity, you’re not just putting your clients’ data at risk – you’re also risking your reputation, and potentially facing costly regulatory penalties, not to mention other costs associated with a breach. 

Here, we’ll explore the best practices for accounting firms to safeguard sensitive data, and how to ensure your firm stays ahead in an evolving threat landscape. 

Why Cybersecurity Matters for Accounting Firms 

Accounting firms handle highly sensitive information, such as: 

• Personal Identifiable Information (PII): Names, addresses, Social Security numbers, etc. 
• Financial data: Bank account details, tax returns, and investment information. 
• Corporate information: Proprietary business data, contracts, as well as strategic plans. 

Cybercriminals see this data as valuable, and breaches can be devastating, leading to identity theft, financial fraud, and regulatory fines. Additionally, in the US specifically, regulations such as the Gramm-Leach-Bliley Act (GLBA) and the Health Insurance Portability and Accountability Act (HIPAA) enforce stringent data protection requirements on firms. Not to mention the FTC Safeguards Rule which has strict cybersecurity standards in place for accounting firms.  

Top 10 Cybersecurity Practices for Accounting Firms 

When it comes to protecting your firm, there are 10 key things you need to implement and maintain to ensure your firm is safe and secure.  

1.Implement Strong Access Controls

• Use Multi-Factor Authentication (MFA): MFA requires two or more verification steps, which significantly reduces unauthorized access. Ensure it is enabled for email, client management systems, and other sensitive applications. Making this mandatory in your firm is essential.  
• Enforce Role-Based Access Control (RBAC): Only grant access to information which is necessary for an employee’s role. This minimizes the risk of internal data breaches. It also provides you with more knowledge if a specific team member gets breached what may have been compromised. 

2. Encrypt Sensitive Data

• Data Encryption: Ensure data encryption both in transit and at rest. This means that if data is intercepted, it cannot be read without the proper decryption key. 
• Email Encryption: Sensitive data should never be sent over email without encryption. Use secure file-sharing systems or encrypted email services for sharing documents with clients. 

3. Regular Security Training for Employees

• Phishing Awareness: Train employees to recognize phishing attempts, one of the most common ways cybercriminals gain access to systems. With the rise of AI, criminals phishing attempts are getting better, and we see more people at risk of falling for these scams. 
• Secure Password Practices: Educate employees about using strong, unique passwords for different systems and accounts. The key here is to make sure each login is unique and not reuse passwords across systems.  
• Ongoing Training: Cybersecurity threats are constantly evolving, so continuous education is crucial. Consider quarterly training sessions to keep security top of mind and ensure you and the team are up to date with the latest threats. 

4. Implement a Strong Firewall and Antivirus Software

• Firewall Protection: Ensure a robust firewall protects your network from unauthorized access. Regularly review firewall settings to maintain protection against new threats. 
• Up-to-Date Antivirus Software: Install and regularly update antivirus software to detect and neutralize malicious software, such as viruses, ransomware, and spyware. 

5. Data Backup and Recovery Plan

• Regular Backups: Back up critical data on a frequent basis. This can be daily, weekly, or in real-time, depending on your firm’s needs and set-up. 
• Test Your Recovery Plan: A recovery plan is only as good as its execution. Regularly test your plan to ensure data can be restored quickly in the event of a breach or other disaster. 

6. Use Secure Cloud Services

• Select Trusted Providers: Use cloud services which have secure data storage and have strong security measures, such as end-to-end encryption and regular security audits. Most cloud software such as QuickBooks, focus on cybersecurity and will be able to provide this if requested.  
• Limit Access to Cloud-Based Systems: Similar to on-premises systems, control who has access to cloud data, and enable logging to monitor access patterns. 

7. Regular Security Audits and Assessments

• Annual Penetration Testing: Hire third-party experts to conduct penetration testing at least once a year. This will identify vulnerabilities that could be exploited by hackers. 
• Vulnerability Scanning: Conduct regular vulnerability scans to identify potential weaknesses in your systems and address them promptly. 

8. Stay Compliant with Industry Regulations

• Understand Regulatory Requirements: Familiarize your firm with the GLBA, HIPAA, and other relevant regulations. Non-compliance can result in heavy fines and damage your firm’s reputation. This includes all regulations relating to the FTC Safeguards Rule which has stringent cybersecurity compliance.  
• Appoint a Compliance Officer: Designate someone within your firm, or work with an external provider like Practice Protect, to ensure your cybersecurity practices align with industry regulations and standards. 

9. Monitor for Suspicious Activity

• Use Intrusion Detection Systems (IDS): IDS tools monitor your network for unusual activities and send alerts when potential threats are detected. 
• Implement Log Monitoring: Keep track of login attempts, file access, and other significant actions. Regularly review logs to identify any unusual patterns that could indicate a security breach. This is also a mandatory aspect within the FTC Safeguards Rule.  

10. Establish a Cybersecurity Policy for Clients

• Client Data Security Policy: Outline the security measures you have in place to protect client information and communicate these to clients. Transparency builds trust. 
• Encourage Secure Client Practices: Educate your clients about security best practices, such as avoiding sending sensitive data through email without encryption. 

Cybersecurity is essential for accounting firms to protect client data and maintain regulatory compliance. By implementing these best practices, you can significantly reduce the risk of a cyberattack and safeguard sensitive information. Remember, cybersecurity is an ongoing process. As new threats emerge, your firm must adapt and strengthen its defenses to stay protected. 

Investing in cybersecurity isn’t just about protecting data; it’s about securing the future of your firm and earning the trust of your clients. 

Wanting to ensure your cybersecurity is sorted? Contact Practice Protect today, and we can take you through a cybersecurity consultation.