A Guide to Cybersecurity for Accountants: Securing Financial Data

Technology has streamlined accounting workflows, but it also introduces new cybersecurity risks.

Accountants need to put a comprehensive cybersecurity strategy in place to protect against data breaches, cyberattacks, and other digital threats. If your firm falls victim to these threats, you could end up facing significant financial losses, a loss of client trust, and even legal challenges.

Below are key cybersecurity strategies to help accounting firms protect against digital threats.

Key takeaways

• Accounting firms are often targeted by hackers due to the sensitive financial data they work with.
• Accounting firms are particularly vulnerable to threats like phishing, ransomware, and business email compromise.
• Implementing access management strategies, firewalls, EDR, and disaster recovery plans can all help you avoid cyberattacks.
• Everyone in your accounting firm should receive training on how to spot and avoid cybersecurity red flags.

Why accountants are prime targets for cyberattacks

When planning their attacks, cybercriminals often seek out accounting firms and the financial professionals that work for them. 64% of organizations in the financial sector faced cyberattacks in the last 12 months.

There are several reasons for this. Here’s why accounting firms are major targets for hackers:

• High-value financial data: Accountants work with valuable financial data, including bank account numbers, credit card numbers, Social Security numbers, tax returns, and more. Hackers seek out this information, as they could use it to conduct identity theft, gather business intelligence, or otherwise exploit it for financial gain.
• Trust and access: Clients often build a strong rapport with their accountants, giving them access to their digital bank accounts and other sensitive financial systems. Hackers can exploit that trust to launch large-scale data breaches.
• Regulatory requirements: Accountants must comply with data privacy laws such as the GDPR in Europe or the CCPA in California. Accountants are also subject to the Gramm-Leach-Bliley Act (GLBA), an FTC consumer privacy law focused on financial information. Unfortunately, some accountants are not compliant with these security requirements, putting both themselves and their clients at risk.

Common attack vectors targeting accountants

Hackers use a variety of strategies when targeting accounting professionals. Some of the most common attack vectors include:

• Phishing: Hackers pose as a trustworthy contact via email, SMS, or voice message, using social engineering strategies to trick the accountant into sharing sensitive data.
• Ransomware: This malicious software locks client data, demanding a large-scale ransom payment to get it back.
• Business email compromise: In a BEC attack, the hacker uses spoofing or other techniques to impersonate or take over a legitimate email account. Then, they’ll use that email account to manipulate their targets and steal sensitive data.
• Vulnerability exploits: With this strategy, hackers will exploit vulnerabilities in outdated accounting software, using them to access sensitive information.
• Insider threats: Disgruntled employees could compromise your organization’s security. Employees who aren’t familiar with cybersecurity best practices could also accidentally expose your organization to external threats.

Essential cybersecurity measures for accounting firms

To keep your accounting firm safe from attacks and data breaches, you’ll need a reliable cybersecurity strategy. Here are some cybersecurity measures that CPAs should implement to keep their clients and their business safe.

Password and authentication policies

A strong password serves as the first line of defense against hackers. Your entire team should be required to use strong passwords that contain a mix of letters, numbers, and symbols. This makes the password more difficult for hackers to guess.

Using a password manager makes it easier to generate and store secure passwords. If you receive notice that your password was compromised in a data breach, make sure to change it as soon as possible to keep your account secure.

Additionally, require your team to implement multi-factor authentication (MFA) on all accounts. MFA requires users to enter a one-time password to enter their accounts, in addition to a username and password. So even if your password is stolen, hackers can’t access your account.

Secure network infrastructure

A strong network infrastructure goes a long way toward protecting your systems from external threats. Install a firewall to block abnormal traffic from your network. Additionally, use intrusion detection and prevention systems to prevent potential threats from turning into cyberattacks. These tools give you more control over your network traffic.

It’s also important for your team to use secure Wi-Fi connections, even for remote work. When team members aren’t in the office, they should use a VPN or other security measures to prevent other users from spying on their online activity.

Endpoint security

In addition to protecting your networks, you should also take steps to protect your devices. This includes desktop and laptop computers, smartphones, IoT devices, and any other hardware you use as part of your work.

All devices should have updated anti-virus and anti-malware protection installed. These programs identify and block known viruses and malware from your systems. This is one of the easiest ways for your team to limit ransomware attacks.

For advanced threat monitoring, use an endpoint detection and response (EDR) program. This software continuously monitors connected endpoints for incoming cybersecurity threats. Endpoint protection allows your IT team to respond to threats more efficiently, regardless of the device being used.

To keep your endpoints safe, have your team update their operating systems and accounting software on a regular basis. Many hackers use vulnerabilities in outdated systems to launch attacks, so regular updates are a necessary part of risk management. Patch management tools can help you find and install available updates more efficiently.

Data encryption

Encryption uses cryptography to make your data unreadable to prying eyes. Accounting firms should encrypt their data both at rest and in transit to prevent data breaches and maintain client trust.

Use encrypted servers and software programs to keep your data safe while it’s in storage. Many modern cloud storage solutions offer AES-256 encryption for maximum protection.

Your communications should also be encrypted to keep data safe while it’s in transit. For internal communications, use tools like Slack or Microsoft Teams, which have built-in encryption options.

Consider using encryption for sensitive emails as well. Platforms like Gmail, Microsoft Outlook, and iCloud Mail have encryption options available, but you’ll have to enable them manually.

Disaster recovery plan

Even if you have a reliable security system in place, cyber attacks can still happen. Hackers are constantly developing new and creative ways to compromise your systems and skirt around security safeguards. Natural disasters could also result in unexpected data loss and damage to your systems.

This is why it’s so important to have a disaster recovery plan in place. This starts with performing regular data backups to an encrypted off-site server. This server should be on a different network and in a different location from your primary server. This way, you’ll be able to recover your data even if your primary servers are compromised.

Your disaster recovery plan should also detail exactly how you’ll respond in the event of an emergency. This usually involves re-securing your systems, restoring lost data, and contacting clients. Your entire team should be trained on this plan to prevent errors or confusion in the event of a disaster.

Access control

Accounting firms should use the principle of least privilege when granting users access to their systems. This privilege states that users should only have access to the parts of the system necessary to do their jobs. This minimizes risk across your system because no one has unlimited access to secure data.

When an employee’s job title changes or they choose to leave the firm, their access level should be changed immediately to reflect that. Conduct regular audits of your access control system to ensure that everyone’s credentials accurately reflect their roles.

Creating a Security-Aware Culture

To keep your systems safe, all employees need to be on board with your cybersecurity strategy. Here’s how to build a security-aware culture for your accounting firm so that the entire team can help limit risks.

Provide comprehensive cybersecurity training for accountants

Accountants may be good at crunching numbers, but they’re not always the best at spotting phishing scams or other cybersecurity threats. 98% of business leaders are unable to spot all signs of a phishing scam.

To combat this problem, host regular cybersecurity training sessions that empower your team to stay safe while working online. These programs should cover topics that are relevant to accountants. Possible training topics for accountants include:

• How to spot phishing messages and BEC scams related to tax season
• How to use accounting software safely
• How to protect your privacy while working remotely
• How to handle client data following financial industry compliance standards

You can tailor your training sessions to your firm’s specific operations, or even to specific roles within the firm.

Conduct phishing simulations and other awareness tests regularly to make sure your employees understand cybersecurity best practices. If your employees aren’t passing the tests, consider adjusting your training sessions to help them learn more effectively.

Create clear data handling policies

Accountants work with a wide range of sensitive client data as part of their day-to-day operations. Develop clear and specific data handling policies for your entire firm so that accountants know how data should be stored and maintained.

These guidelines should specify how to store, access, share, and dispose of client data safely. For example, your policy might state that accountants should avoid unencrypted email when sharing certain types of data.

If your team has a remote or hybrid work arrangement, be sure to outline data handling policies for remote work. This can include bring-your-own-device policies for accountants who use personal devices at work.

Use industry-specific incident reporting procedures

Accountants and other financial professionals need to adhere to strict reporting procedures in the event of a data breach. This is necessary for compliance with GLBA and other financial industry standards.

Create industry-specific reporting procedures for your entire team to follow. This should involve notifying superiors immediately if you suspect a security incident, as well as notifying the appropriate regulatory boards if a data breach is confirmed. In most cases, you will also need to notify clients when their data has been compromised.

Promote a culture of confidentiality and security

Ideally, your employees should be invested in the safety and security of your organization. Have discussions about the ethical and legal responsibilities accountants have to their clients, including confidentiality and safe data handling. Your team should understand what’s at stake with cybersecurity risks.

Leveraging technology and expertise for accounting cybersecurity

Investing in the right technology and cybersecurity expertise will help protect your accounting firm for years to come. Here’s how to use technology to strengthen your firm’s cybersecurity posture.

Use secure accounting software and cloud services

The right accounting software will help your entire team work efficiently and accurately. However, when choosing accounting software programs for your organization, be sure to choose platforms with advanced, reliable cybersecurity features.

This is also a very important consideration when choosing cloud storage providers. For many accounting firms, storing data in the cloud is more cost-effective than using on-premise servers. However, when selecting a cloud storage provider, make sure that they use current cybersecurity best practices and that they are compliant with financial industry data privacy standards.

MSSPs for accounting firms

Many accounting firms don’t have the budget for a full-scale IT team in-house. If this is the case for you, consider partnering with a managed security service provider, or MSSP, such as Diamond IT. An MSSP is a third-party organization that provides IT, cybersecurity, and compliance services for your business.

When you partner with an MSSP, you get access to specialized expertise to strengthen your security posture. MSSPs can also help with 24/7 monitoring, cybersecurity training, compliance audits, and more.

Regular security audits and assessments

New security threats emerge regularly, so you’ll need to update your cybersecurity strategy to stay safe. Invest in regular penetration testing and security audits to identify weaknesses in your financial information systems. By proactively conducting security audits, you can address these vulnerabilities before they lead to cyberattacks.

Keep your accounting practice safe from cybercrime with Diamond IT

For accountants, prioritizing cybersecurity is necessary to keep your clients, your employees, and your business safe. If your firm needs reliable cybersecurity support, Diamond IT is here to help. Our expert team can help with all your IT needs, from network configuration to system monitoring to compliance. Schedule a consultation today to get started.