Cyber Security Threats Facing Accounting Firms: How to Protect Your Firm’s Data

No matter the size, every business is at risk for cyber security threats, and accounting firms are no exception. In fact, accounting firms are at increased risk due to the sensitive nature of the data they handle, such as bank account information, identification data, tax records, and credit card information. This data is highly attractive to cybercriminals which can be used to commit fraud or theft, thus making accounting firms prime targets for attacks! Not only are accounting firms at risk of theft of sensitive information they are also at risk of ransom attacks that could cripple their business which is why it’s so important for accounting firms to have a robust data security plan.

Cybersecurity should therefore be a top priority for all accounting firms. We will discuss the types of costs an accounting firm faces after a cyber attack, common security threats that accounting firms face, and some simple steps you can take to improve your data security posture.

Costs of a Cyber Attack

The potential costs associated with a cyber incident include, but are not limited to:

  • Notification Costs: If your firm handles personal data, you may be required to notify individuals of a breach under the Privacy Act 1988. These notification requirements can be costly, especially if the breach affects many individuals
  • Regulatory Fines: Depending on the type of data involved in a breach, your firm may be subject to regulatory fines
  • Reputational damage: A data breach can damage your firm’s reputation and make it difficult to attract and retain clients
  • Business Interruption Costs: A cyber attack can cause your firm to lose business, leading to revenue loss. In addition, you may incur costs to restore lost data and systems
  • Legal Costs: If your firm is sued as a result of a data breach, you may incur significant legal costs
  • Forensic and investigative costs: You may need to hire a forensic investigator to determine the cause of the breach and help you mitigate any future risks
  • Loss of data or damage to data integrity: A cyber attack can result in data loss or damage, which can be costly to replace
  • Ransom: In some cases, cybercriminals will demand a ransom in exchange for not releasing stolen data or attacking your systems. In many cases, paying the ransom will not guarantee that the cybercriminal will not release the data or attack your systems

Common Cyber Security Threats Facing Accounting Firms

  • Insider threats: A threat posed by employees or contractors who have authorised access to your firm’s systems or data. These individuals may intentionally or unintentionally misuse their access to damage your system or steal information
  • Phishing emails: Emails that appear to be from a legitimate source but are actually from a cybercriminal. These emails attempt to trick people into giving up sensitive information and may contain attachments or links that can install malware on your computer in a bid to steal information
  • Malware: Malicious software that can damage your computer or steal information. Examples of these are viruses, spyware, and ransomware
  • Ransomware: A type of malware that encrypts your files and demands a ransom to decrypt them. A ransomware attack can disable your systems and make it difficult or impossible to access your data. The attacker may also threaten to release sensitive data if the ransom is not paid
  • Social engineering: A type of attack where cybercriminals use deception to trick people into revealing information or taking an action that will allow them access to systems or data
  • Weak Passwords: Using weak or easily guessed passwords is one of the most common security mistakes businesses make. Attackers can use password-cracking tools to guess common passwords

Tips for reducing your cyber security risk

1. Undertake a cyber security risk assessment

Part of protecting your firm’s data is making a cyber security risk assessment. This will help you identify the specific risks that your firm faces and what steps you need to take to mitigate those risks. To make a cyber security risk assessment, you should:

  • Identify the types of information that your firm stores and processes
  • Identify the devices that are connected to your network and any threats or vulnerabilities associated with them
  • Identify any potential vulnerabilities in your networks, such as weak passwords or unpatched software
  • Identify the people who have access to your network and their roles
  • Identify any external factors that could pose a threat to your networks, such as natural disasters or power outages
  • Identify the threats that are most likely to target your firms, such as malware or phishing emails
  • Identify the potential impact of a cyber attack

2. Developed an information security policy

You should develop an information security policy to protect your firm’s data. This policy should include guidelines for handling and protecting sensitive information and establish procedures for what to do during a cyber security breach. Your employees should be trained on this policy so that they know how to protect your firm’s data.

3. Review and update your information security policy at least annually

Your information security policy should be reviewed at least annually. This will ensure that it is up-to-date and relevant to your firm’s current data security threats. Reviewing your policy will also help you identify any gaps in your security measures.

4. Implement strong security measures

As we have discussed, one of the most important things you can do to protect your firm’s data is to implement strong security measures. Some of the measures you should take include:

Educate staff and invest in training
One of the best ways to protect your firm’s data is to educate your staff and invest in training. Create a culture of security within your firm by prioritising cyber security. Your employees should be trained on your information security policy and procedures. They should also be aware of the latest data security threats and how to protect against them.

Invest in firewalls and intrusion detection systems
A firewall can protect your network from external threats by preventing unauthorised access. Intrusion detection systems monitor your network for suspicious activity and can alert you to potential attacks.

Engage professionals to perform regular security audits
Engaging professionals to perform regular security audits of your firm’s data is essential. These audits will help you to identify any potential security vulnerabilities. They will also help you to ensure that your security measures are adequate and effective.

Regularly update your software
Make sure that you regularly update your software. This includes your operating system, applications, and security programs and will help to protect your system from the latest security threats.

Multifactor authentication
Implement multifactor authentication for all of your firm’s accounts, adding an extra layer of security and making it more difficult for attackers to gain access to your accounts.

Encrypting sensitive information
Sensitive information stored on your network should be encrypted, which will help protect the information in case of a data breach.

Install Antivirus software
Antivirus software helps to protect your computers from malware.

Password management
You should have a password management policy to ensure that your employees use strong passwords. Passwords should be changed regularly and should never be reused.

Backing up data
You should regularly back up your firm’s data, ensuring that you have a copy of it if it is lost or destroyed or if you are a victim of a ransomware attack.

As you can see, accounting firms face many data security threats. By taking the steps outlined above, you can help to protect your firm’s data from these threats. Stay up-to-date on the latest data security trends and ensure you take all the necessary precautions to protect your firm’s data. And remember that when it comes to cyber-attacks, it’s a matter of WHEN you get attacked, not IF. So don’t wait until it’s too late to take action.

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