How Accounting Firms Can Maintain High Standards of Security?

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How Accounting Firms Can Maintain High Standards of Security?

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Today, security is a global issue and every business industry is struggling to establish high standards of security for their employees and clients. Big companies like Yahoo are already struggling with data security, now imagine how difficult it will be for small accounting firms with limited resources to set up strong data security channels.

In accounting, a breach of data can cause huge trouble and in some adverse cases, CPA firms have to shut down their doors because of small security failures. If you are a CPA and someone steals confidential financial records of your client from your computer, then this will destroy your relationship with your client pretty badly. Additionally, you can be held liable for the financial losses that incurred because of your security failure, and bearing such cost for a small accounting business isn’t possible.

Data breach costs can range from class-action lawsuits and fines to the cost of recovering data. But, the biggest cost that CPA firms have to bear is the loss of revenue and clients’ trust.

How To Make Your Accounting Firm Secure?

In the last few years, several cases have been recorded where cybercriminals have stolen Social Security numbers from outside the IRS and used this information to access IRS e-Filing personal identification numbers to file tax returns electronically. Just one loophole can give access to so much confidential information to hackers. There is a plethora of high-tech security software and tools available in the market, but to make your firm highly secure you have to follow some preventative steps such as.

1.  Constant Security Check-Ups

You have to regularly monitor your security system because you never know when a small security hole can attract hackers. CPA firms should set up periodic reviews to understand the level of data security. They need to make proper IT strategies based on different aspects like –

  • Should data security jobs be assigned to in-house staff or outsourced it?
  • Are all the confidentiality agreements of the company maintains high security and privacy?
  • Does a regular risk assessment have been performed?
  • Does your firewalls and security software are in place? Etc.,

Must Read CPA Worries Clients’ Data Disclosure In Offshoring Tax Services: Should They Worry?

2.  Technical Training for Staff

Is a critical step in making your accounting firm secure. This step involves providing regular training and awareness programs to your employees to help them understand the importance of security and how to identify and respond to security threats.

Here are some steps you can take to educate your employees on security best practices:

  • Develop a security policy: Develop a comprehensive security policy that outlines the security measures that your accounting firm has implemented and the expectations for employees to follow these policies. This policy should cover areas such as password management, email security, remote work, and data handling procedures.
  • Provide regular training: Provide regular training to your employees on security best practices, including how to identify and respond to security threats. This training should cover topics such as phishing attacks, malware, social engineering, and other common threats.
  • Conduct simulated phishing attacks: Conduct simulated phishing attacks on your employees to help them identify and respond to phishing attempts. This can be done using software that simulates phishing emails and provides feedback to employees based on their responses.
  • Encourage reporting: Encourage your employees to report any suspicious activity or security breaches immediately to the appropriate personnel. Develop a clear reporting procedure for security incidents.
  • Test security measures: Test your security measures regularly to identify any weaknesses and address them promptly. This includes testing firewalls, anti-virus software, and other security measures.

By educating your employees on security best practices, you can create a culture of security within your accounting firm. Employees will be better equipped to identify and respond to security threats, reducing the risk of a security breach. This step also helps to ensure that everyone in your accounting firm is aware of the importance of security and understands their role in maintaining a secure environment for your client’s financial data.

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3.  Physical & Administrative Security

The physical security of accounting firms prevents intruders from harming business operations. Every employee should be given a special key card to enter the work premises and a proper visitor log should be maintained. There should be CCTV cameras installed at all the main entry and exit points of the office so that any kind of unethical activity can be recorded.

Hackers are very smart these days, they target the in-house staff of companies to steal confidential information. Your employees can accidentally or under pressure can provide sensitive information to hackers. So, to avoid such a problem, you should provide administrative access to only selective and trusted employees. CPA firms should control access to data and only share limited information with their employees.

4. Limit Access To Sensitive Information

Limiting access to sensitive information is a crucial step in making your accounting firm secure. It involves implementing a system of role-based access control that ensures only authorized personnel have access to sensitive financial information.

Role-based access control (RBAC) is a security model that provides access to data based on the roles and responsibilities of individual users within an organization. This model assigns permissions based on an individual’s job function, and access is granted based on a user’s role in the organization. This ensures that employees only have access to the information they need to perform their job responsibilities.

To implement RBAC in your accounting firm, you will need to:

  • Identify the roles and responsibilities of employees who have access to sensitive financial information. This includes accountants, bookkeepers, and other financial professionals.
  • Determine the level of access needed by each role to perform their job responsibilities.
  • Create groups based on roles and assign access permissions to each group.
  • Review and update access permissions regularly to ensure that they are still appropriate for each employee’s job responsibilities.

By implementing RBAC, you can ensure that only authorized personnel have access to sensitive financial information, reducing the risk of a security breach. This system also helps to maintain data integrity, as employees are only able to view and modify data that is relevant to their job responsibilities.

Must Read 2023: Why you should consider Outsourcing Payroll Processing

5.  Select your Partner Carefully

Sometimes accounting firms hire outsourced accounting services to share their workload. Especially, small CPA firms use different outsourced services to reduce some of their work burdens during rush seasons. But, while selecting the outsourced accounting services for your business, you have to determine that company has strong security systems because if you share your client’s data with the unsecured company, then this will eventually going to damage your business’s reputation.

  • Employees Confidentiality – They sign a non-disclosure agreement with every employee before hiring them and in the agreement, a penalty clause is added in case of a data breach. Additionally, they won’t allow their employees to transfer the company’s data over their e-mail or devices.
  • IT Security – The high maintenance of IT security is crucial for accounting companies. But, CapActix has made sure to establish high-end IT security through regular security audits, SSL Secure network, antivirus systems, lease line ports connectivity, and much more.
  • Office Security – To protect data physically, CapActix has maintained the office security ground rules as well. They have a proper security check system with 24*7 CCTV monitoring, security guards, fireproof premises, power backups, and so on. 
  • Powerful Infrastructure – The latest tech tools are used by them to keep their system bug free such as licenses for Windows OS, dual TFT monitoring, cloud-based servers, UPS backup, firewall, and integrated LAN.

6. Backups And Recovery

Backup and recovery are crucial aspects of making your accounting firm secure. Backups and disaster recovery planning ensure that in the event of a security breach or other unexpected event, your business can continue to function with minimal downtime and minimal loss of data.

Here are some steps you can take to ensure that your accounting firm has an effective backup and recovery system in place:

  • Identify critical data: Determine which data is critical to your business operations and prioritize backup and recovery for that data.
  • Develop a backup schedule: Determine how often data should be backed up and ensure that backups are performed regularly.
  • Choose a backup method: Select a backup method that is appropriate for your business needs, such as cloud-based backup, on-site backup, or off-site backup.
  • Test backups regularly: Regularly test backups to ensure that data can be restored in the event of a disaster.
  • Develop a disaster recovery plan: Develop a disaster recovery plan that outlines procedures for responding to a security breach or other unexpected event. This plan should include procedures for restoring data from backups, identifying the cause of the breach, and implementing measures to prevent future breaches.
  • Consider managed services: Consider outsourcing backup and recovery to a managed services provider who can provide 24/7 monitoring and management of your backup and recovery systems.

By implementing a backup and recovery system, you can ensure that your accounting firm is prepared for unexpected events and can recover critical data quickly in the event of a security breach or other disaster. This provides peace of mind to both you and your clients, knowing that their financial data is well-protected and can be restored in the event of an emergency.

Must Read Security Checks You Must Consider While Hiring Offshore Accounting Partner

Secure Your Business Today

Security is important and we all know that but it is not feasible for every accounting firm today to adopt higher standards of security measures to protect their data. In acquiring the technology-based security tools and setting up the physical security system, lots of money is required which isn’t possible for small-scale business organizations to invest in.

So, if you are a small-scale accounting firm willing to provide high-end security services to your clients, then you can find a partner like CapActix that can provide you with an extra level of security. If you have any questions regarding our security system, then drop your queries at email – [email protected]. or can call on +201-778-0509.

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Connect With Us:

+91 902-340-4337

India : A-306, Privilon, Nr Iscon Cross Road Iscon-Ambli Road, A’bad – 380058

+971 58-249-7106

Dubai : 503 Mohammad Noor Talib Building, Khalid Bin Walid road, Opp Royal Ascot Hotel, Dubai, UAE

+1 201-778-0509

United States : 347 Fifth Avenue Suite 1402-227 New York, NY 10016

+61 425-383-594

Australia : 45A Booreea Boulevard, Cordeaux Heights, NSW 2526, Australia

+256 772-420-075

East Africa : Plot 604, Coral Crecent Kololo, Kampala Uganda

Copyrights 2024 CapActix Business Solutions Pvt Ltd

Dinesh Suthar
Director – Digital Transformation

Dinesh Suthar
Director – Digital Transformation

Dinesh Suthar, a Fellow member of Chartered Accountants of India and commerce graduate, boasts a decade of industry experience in Tax and Finance roles. Having worked with Shell Oil and Amazon (India / UK), he successfully led numerous finance, audit, and tax process automation projects, resulting in significant time savings. Passionate about leveraging new technologies for business growth, he now spearheads CapActix’s Digital Transformation team, overseeing Finance Digitization and Tax Technologies initiatives.

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