Tax season is the busiest time for certified public accountants (CPA’s) and hackers alike. While companies wonder how CPA’s can stay safe during tax season, hackers wonder how to get their data. This makes tax season the most critical time for any CPA to protect their client data.
Accounting systems have different ways to secure data, from secure cloud servers to partnering with a Managed Service Provider. With that said, here’s why it’s vital for certified public accountants to secure their data, and why it’s especially crucial during the tax season.
Threats Against Certified Public Accountants
CPA’s must protect their data year-round, especially during the tax season when hackers are most likely trying to breach your system. According to the FBI, hackers are attacking accountants and companies even more since the pandemic started, with more than 4,000 cybersecurity complaints a day.
Hackers are looking for the easiest way to target your CPA firm or company, targeting any area or loophole they can find. Cyber-attacks can happen anywhere and at any time, with different threat levels for various company sizes.
Types of cyber attacks such as:
- Phishing attacks
- Malware attacks
- Ransomware attacks
- Social engineering
CPA’s must protect their data and devices from hackers, or they may lose their business in the future. Companies need to start finding ways to improve their security, from commercial insurance to a more robust IT security strategy all year-round.
Here are 5 data protection tips your accounting firm can use to protect your data for this year’s tax season.
1. Cybersecurity Education For Employees
CPA firms must educate their employees on cybersecurity. Cybersecurity is an ongoing process, and companies need to ensure that their employees are up to date on the latest security standards.
From simple data breaches to ransomware, companies experience all kinds of cyberattacks. Many of these breaches result from human error, and employees may be the weakest link in your company’s security. You want to ensure that you and your team members can at least identify cyber fraud and social engineering efforts.
For starters, even the most basic education on phishing attacks, malware, ransomware, and encryption should help reduce human errors within the company. As a fact, 91% of all cyber-attacks on accounting firms come in the form of phishing scams. A proactive IT team should be able to help CPA’s to identify such threats and provide much-needed solutions.
When it comes to cybersecurity, most companies are worried about external threats. However, internal threats are a real threat, too. For example, an employee may accidentally delete important information, accidentally send it to the wrong person, or accidentally save it to the wrong server.
2. Passwords Are Not Enough
Passwords only protect one part of the data: the access point. Hackers have many ways to connect to your system, access your data, and take them away from you. This data is not only emails but also client financial information.
Companies’ number one mistake in security is using the same password for multiple systems. Even with a secure password, hackers can still penetrate an insecure database. Additionally, most networks use passwords that are easy to guess, so hackers can easily brute force their way into your system.
Building a secure system goes beyond using passwords. Additional security like authorization keys, granular permissions, two-factor authentication and secure VPN’s are some vital protocols that any CPA must consider.
VPN’s are an entirely different way to secure servers. VPN’s create a secure tunnel for your data, keeping it safe from the outside. SSL VPN’s encrypt the data, which means hackers can’t read it, nor can they breach your system.
With a VPN or cloud platform, your company can log in to any system without worrying about any threats. You’ll also protect your network’s security from outside threats, as well as keep your business’s data safe.
When CPA’s store their clients’ information, they must ensure that it is secure and encrypted; otherwise, they may face serious legal consequences. If you have information kept in the cloud, check that your IT service provider adheres to the proper compliance requirements for protection. Additionally, confirm they have a safety procedures & technology in position to ensure your information continues to be secure.
3. Secure Communication Channels Matter
When CPA’s communicate with their clients, they must make sure that their emails are encrypted, protecting both identities and information. According to the United States General Services Administration, more than 80% of companies do not have encryption on their email.
Data breaches and leaks happen because companies do not encrypt their emails, and criminals can easily intercept them. When you encrypt your emails, you protect both identities and information.
You want to secure your company’s internal communications to ensure that no man-in-the-middle attacks are happening on your watch. Companies need to add a more robust encryption channel, especially when dealing with client information, regardless of client size.
4. Build a Written Information Security Plan
Data breaches and network outages happen every day. Usually, businesses only plan for these threats when it’s too late. Having a business continuity & disaster recovery plan in place should protect your CPA firm from these kinds of data security issues.
As of January 1st, 2023, the IRS is now requiring any and all tax preparation firms to have a Written Information Security Plan, or WISP, in place. Should they be audited (either at random or after a cyber security incident), and not have one developed and fully implemented, they can be subjected to a $100,000 fine! So it’s not just for the sake of documenting your IT processes, having a WISP can save your company from a financial and PR disaster.
Strategic IT security plans protect companies from disasters and threats while following compliance standards. They include backing up your data and ensuring that your information is secure at all times.
Additionally, having a plan protects you from potential lawsuits, as even a minor data breach can incur steep fines, costing your company thousands of dollars (or even possibly arrest) on behalf of the FTC Safeguard’s Rule.
5. Partner with the Best Managed IT Provider
If you are entrusting your clients’ tax information in the Cloud, you should ensure it remains in secure hands. Naturally, it is your IT department/provider’s obligation to guarantee your information is safe and also available for your team. However, are they doing all that is required to guarantee this occurs?
It is extremely vital to pick a credible Managed IT Services & Cloud provider since you are basically turning over all your information to them. So, besides enhancing your defenses, you should verify just how well-prepared they are to prevent the dangers postured by cybercriminals.
Secure cloud servers are also vital, ensuring secure backups for all your data. Compliance standards like the GDPR and SOC Types 1 & 2 provide a strong enough guideline that CPA’s and accounting firms can follow to help protect client data.
The Bottom Line
Security is never static. CPA’s and accounting firms need to secure their data at all times, whether they’re busy preparing taxes or in the middle of an audit. Having a solid disaster recovery plan in place or adopting IT for Accounting protects your company, your clients’ information, and your company’s finances.
Even the slightest breach can be catastrophic for CPA’s and companies alike. Beefing up your security, not only during tax season, but the entire year, is a crucial process to keep your business running.
If you’re an accounting business owner looking for peace of mind this tax season, Contact Us today for a Free IT Evaluation. Nerds Support will provide all the help and advice we can give to put your business on the path to grow!