In 2023, it is more crucial than ever to protect your accounting firm from data security breaches that may impact confidential client data in order to safeguard your operations, reputation and financial health.
In our article, you will learn how to protect your accounting firm’s financial data from the risk of a cyber attack.
Why is cyber security in accounting?
The accounting profession is a prime target for cyber criminals. CrowdStrike, identifies that the reason for this is the vast amount of sensitive data in the accounting industry.
Frequently stolen data for firms can include bank account information, financial data, tax identification numbers, payroll information, and investments data.
The Australian Cyber Security Centre revealed in their 2021-22 annual cyber threat report some sobering statistics about accounting cybersecurity:
- Annually, cybercrime costs small businesses an average of $39,555 medium-sized businesses approximately $88,406 and large firms $62,233;
- The accounting industry is part of the sixth most targeted sector in Australia, with 7 per cent of all cyber-attacks;
- The number of cyber attacks has risen 13 per cent in the past year, which means on average, every seven minutes a breach occurred.
What are the threats to my accounting practice?
Accidental data security breaches caused by practice staff can be just as disastrous a risk as cyberattacks.
Sensitive financial data ending up in the wrong hands, whether by emailing it to the wrong person, unwittingly posting it online, or misplacing a USB stick, could incur hefty fines under the NDB Scheme.
How to strengthen cyber security in your accounting practice today
Here are five critical security measures you should take as soon as possible to keep your data secure:
1. Ensure you have intrusion detection systems in place
Hackers are constantly evolving their tactics to outsmart intrusion detection systems like anti-virus programs and malicious software scanners. It’s therefore critical to ensure your operating systems, anti-virus programs and firewalls are always up-to-date with the latest security updates.
It’s also a good idea for firms to prohibit employees from accessing client data on their personal computers or when connected to external Wi-Fi networks, as there is no guarantee they will be secure.
2. Use two-factor authentication
Applications that offer this form of security require not only a username and password to log in, but also a code that is sent to your phone. This means that without your phone, your account can’t be accessed by hackers.
If two-factor authentication is unavailable, ensure you require your employees to change their passwords regularly.
3. Educate employees about data security risks
Training employees about hackers' cunning methods, from ransomware attacks to phishing attacks, will help them know what to look out for..
An increasingly common and insidious method in the accounting industry is a form of email-borne attack known as “spear-phishing”. Often disguised as a legitimate email, these attacks encourage the recipient to open an attachment or link infected with malware. In some cases, the malware can encrypt private information until a ransom is paid.
As they typically mimic emails you would expect to receive, spear-phishing can easily fool those unaware of this kind of breach. Encourage employees to look out for these attacks by always checking the sender’s email address and being wary of attachments or links from external emails.
4. Control data access in your practice
Having internal controls in place for who in your practice can access what data helps prevent data security leaks. Ensure you entrust data access rights only to those users who need it.
Access software for accountants allows firms to control who can access client data and perform specific operations. For example, you may decide only certain users have permission to delete clients from your database, or that only certain users may view their own returns.
5. Backup your data
Given today’s increasingly perilous cybersecurity landscape, firms are running huge risks if they don’t back up their data regularly.
Access Accountants contains an online backup system allowing you to securely store your data in the cloud, reinforcing cybersecurity best practices. Our technology uses automatic daily backups and data encryption to ensure all your critical data is up to date, secure, and recoverable.
Know your obligations under the NDB Scheme
Introduced in 2018, the NDB scheme requires businesses to notify individuals when the loss of their information is likely to result in serious harm.
It’s imperative to familiarise yourself with the scheme to see if your practice needs to comply, and if so, ensure you can meet its obligations in the event of a data breach.
How accounting firms can prevent data breaches
Our accounting practice management software has been built with accountants' data protection in mind, so why not talk to a specialist to find out how we can help your firm today.
If you or your accounting practice employees are working from home, you must take care to protect your firm from risks to cybersecurity that may occur within a home office environment, including breaches to confidential accounting data.
Download our employee checklist for a detailed look at how you and your employees can avoid potential cybersecurity threats and keep data secure.