Securing Your CPA Firm in 2023 – Why 19% Failed in 2022 and Lessons to Learn

Have you ever considered how the digital revolution has impacted the accounting industry, particularly CPAs and accounting firms? As we increasingly depend on technology to manage and store sensitive financial data and personally identifiable information, the accounting industry is more susceptible to cyber threats.

As data custodians entrusted with sensitive financial and personal information, these firms are prime targets for cybercrimes. Surprisingly, more than half of all small businesses, which include many CPA firms, have already fallen victim to a cyber-attack.

Data breaches have become an unfortunate reality of the digital world we live in. No industry is immune, and the financial sector, which includes CPAs and accounting firms, finds itself particularly vulnerable. In 2022, the finance industry was the second most breached industry, accounting for 19% of the breaches handled, a 3% drop from 2021, where it accounted for 22% of breach cases.

Yet, while the percentage of breaches in the finance sector saw a slight drop, the impact and concern around these breaches significantly escalated. Evidence of this growing concern is reflected in the 127% year-on-year increase in the number of calls following a data breach and a 126% increase in the amount of identity monitoring taken up in the finance sector, compared to a 66% increase for consumers in health care. These statistics underscore the increasing awareness and concern of individuals and organizations about the security of their financial data.

With the rapid digitalization of businesses, robust cybersecurity practices for CPAs and accounting firms have moved from being a mere suggestion to an absolute necessity. Why, you ask? Because the accounting industry, with its treasure trove of sensitive data, has become an attractive target for cybercriminals.

But that’s not all. The industry also must contend with stringent regulatory requirements and the potential reputational damage that can come with data breaches.

In the face of these threats, CPAs and accounting firms must adopt robust cybersecurity practices. The repercussions of a data breach go far beyond immediate financial loss, extending to long-term reputational damage that can erode client trust, which is the bedrock of the accounting profession.

With the understanding that living in a complete data breach-free world is not realistic, firms must not only have processes and technology in place to prevent data breaches but also a plan of action in case a breach occurs.

The Cybersecurity Landscape in Remote Work

The transition to remote work has not been without its hurdles. One of the most significant challenges lies in the realm of cybersecurity. As professionals exchange sensitive information outside the fortified walls of corporate networks, they become more vulnerable to cyber threats. The risk is even more pronounced in the accounting sector, where the handling of confidential financial data is a daily occurrence.

Since the onset of the pandemic, there has been a staggering 300% increase in cyberattacks, with hackers exploiting the vulnerabilities of remote work setups. For CPAs, this means that the stakes are higher than ever. The need to secure digital workspaces is not just about protecting one’s own data; it’s about safeguarding the trust and financial well-being of clients.

Embracing Essential Cybersecurity Practices

In the face of these challenges, CPAs must arm themselves with robust cybersecurity practices. Here are some of the most critical measures to consider:

• Virtual Private Networks (VPNs): A VPN acts as a secure tunnel for your internet traffic, preventing it from being intercepted by malicious actors. It’s akin to sending a letter in a locked box rather than a standard envelope – the contents are much harder for prying eyes to access.
• Password Hygiene: Passwords are your first line of defense against unauthorized access. Implementing strong, unique passwords for each of your accounts is akin to having a different key for every lock. Additionally, consider using a reputable password manager to keep track of your passwords securely.
• Two-Factor Authentication (2FA): 2FA adds an extra layer of security to your accounts. It’s like adding a second lock to your door – even if someone manages to pick the first lock (your password), they’ll still be stopped by the second one.

Read on to explore more ways to fortify your remote work setup and build a secure, efficient virtual office.

Recognizing and Combating Phishing Scams

Phishing scams are a prevalent threat in the digital world. These scams often come in the form of deceptive emails or messages designed to trick you into revealing sensitive information, such as login credentials or credit card numbers. It’s akin to a wolf in sheep’s clothing, appearing harmless or even helpful at first glance.

To combat phishing, it’s crucial to maintain a healthy level of skepticism. Be wary of unsolicited communications, especially those that ask for personal information. Always verify the source before clicking on any links or attachments. Remember, it’s better to err on the side of caution than to fall victim to a scam.

The Role of Regular Updates in Cybersecurity

Keeping your software and systems up-to-date is a fundamental aspect of cybersecurity. Each update not only brings new features but also patches potential security vulnerabilities that hackers could exploit. Neglecting updates is like leaving your doors and windows unlocked, providing an easy entry point for intruders.

Set your devices to update automatically whenever possible. If automatic updates aren’t an option, make a habit of checking for updates regularly. This simple practice can go a long way in keeping your virtual office secure.

The Importance of Keeping Work Data on Work Devices

When working remotely, it can be tempting to use personal devices for convenience. However, this can pose significant security risks. Work devices are typically equipped with advanced security measures that personal devices may lack. Using personal devices for work is like storing confidential documents in a public locker – they’re simply not as secure.

Ensure that all work-related data is kept on work devices. If you must use a personal device, make sure it’s secured with up-to-date antivirus software, a strong password, and other necessary security measures.

Securing Your Personal Network

When working from home, your personal network becomes your lifeline to your professional world. However, unlike corporate networks, personal networks may not have the same level of security measures in place, making them potential targets for cyberattacks. It’s like working in a house with an open front door – anyone could walk in.

To secure your personal network, start by changing the default login credentials of your router to prevent unauthorized access. Next, ensure your network is encrypted by using Wi-Fi Protected Access 2 (WPA2) or Wi-Fi Protected Access 3 (WPA3). This encryption helps protect your information as it travels across your network.

Additionally, consider setting up a guest network for non-work devices. This way, even if a device on the guest network is compromised, the attacker won’t have direct access to your work devices.

The Role of Education in Cybersecurity

Cybersecurity isn’t just about tools and technologies; it’s also about awareness and education. The most advanced security system in the world can’t protect you if you unknowingly give away your password or click on a malicious link. It’s like having a state-of-the-art security system but leaving the key under the doormat.

Stay informed about the latest cybersecurity threats and best practices. Participate in cybersecurity training programs if available. Remember, in the realm of cybersecurity, knowledge truly is power.

WRAPPING UP

Cybersecurity is now more important than ever for CPAs. By embracing the practices outlined in this blog, you can create a secure virtual office and continue serving your clients with confidence. Remember, cybersecurity isn’t a one-time task but an ongoing commitment. Stay vigilant, stay informed, and stay secure.

In the end, the safety of your virtual office lies in your hands. With the right knowledge and tools, you can navigate the digital landscape confidently and securely.

PARTNER WITH QXAS FOR SECURE ACCOUNTING OUTSOURCING SERVICES

Navigating the landscape of accounting outsourcing shouldn’t feel like traversing a cyber minefield. With the right partner, like QXAS, you can confidently move forward with a secure solution that offers exceptional expertise, stringent data protection, and consistently high-quality service. We at QXAS put cybersecurity at the forefront of our operations, ensuring the highest standards of data security are met while managing your accounting, bookkeeping, and tax prep requirements. Our commitment to data security means you can concentrate on expanding your business, secure in the knowledge that your accounting data is in safe hands.