A CPA firm should implement robust cybersecurity protections to safeguard sensitive client data, comply with legal and regulatory requirements, and protect its reputation. Not only are there strict legal obligations to which companies must comply, there is the moral obligation CPA firms have to protect client data.  Below, we have broken down key cybersecurity protections and the reasons they are essential for every CPA firm to leverage (and we did it in easy to understand, non-technical language): 

1. Data Encryption 

• What: Encrypt sensitive data both in transit (e.g., emails, file transfers) and at rest (e.g., on servers, backups). 

• Why: Encryption (the process of converting information and data into code) ensures that even if data is intercepted or accessed by unauthorized parties, it remains unreadable without the decryption key. 

2. Multi-Factor Authentication (MFA) 

• What: Require multiple verification steps (e.g., password and one-time code) for accessing systems. 

• Why: MFA (a security measure that requires users to provide more than one form of identification to log in to an account) significantly reduces the risk of unauthorized access, even if passwords are compromised. 

3. Strong Access Controls 

• What: Use role-based access controls (RBAC) to limit data and system access to only those who need it for their job. 

• Why: Minimizing access reduces the risk of insider threats and unauthorized access. 

4. Endpoint Protection 

• What: Deploy antivirus, anti-malware, and endpoint detection and response (EDR) software on all devices. 

• Why: Protects against malware, ransomware, and other threats that can compromise devices and data. 

5. Firewall and Network Security 

• What: Use firewalls, intrusion detection/prevention systems (IDS/IPS), and secure Wi-Fi networks. 

• Why: Prevents unauthorized access to networks and monitors for suspicious activities. These cybersecurity measures continuously monitor your network! 

6. Secure Data Backup and Recovery 

• What: Regularly back up data using encrypted, secure methods and maintain both on-site and off-site backups. 

• Why: Ensures the firm can recover critical data in case of ransomware attacks, system failures, or other disasters such as flood or fire. 

7. Patch Management 

• What: Regularly update and patch operating systems, software, and hardware. 

• Why: Patch management is the process of systematically identifying, acquiring, testing, and deploying software updates (called “patches”) to address security vulnerabilities, fix bugs, and enhance the functionality of computer systems and applications. Vulnerabilities in outdated systems are a common entry point for cyberattacks; patch management addresses such vulnerabilities on an ongoing basis. 

8. Email Security Solutions 

• What: Use spam filters, email encryption, and tools to detect phishing and malicious attachments. 

• Why: Email is a primary vector for phishing attacks, which can lead to credential theft or malware infections. 

9. Employee Training 

• What: Conduct regular cybersecurity awareness training for all staff. 

• Why: Employees are often the weakest link in cybersecurity. Training helps them recognize phishing attempts, use strong passwords, and follow security best practices. 

10. Incident Response Plan 

• What: Develop and periodically test a plan for responding to security incidents, including breach notification procedures. 

• Why: A well-prepared response minimizes damage, reduces downtime, and ensures compliance with legal requirements. 

11. Vendor Risk Management 

• What: Assess and monitor the cybersecurity practices of third-party vendors with access to client data or systems. 

• Why: Vendors can be an entry point for attackers, so ensuring they follow robust security standards is critical. 

12. Physical Security Controls 

• What: Secure offices, file storage, and devices with locks, security cameras, and access restrictions. 

• Why: Prevents unauthorized physical access to sensitive information or IT infrastructure. 

13. Secure Remote Access 

• What: Use virtual private networks (VPNs), MFA, and secure configurations for remote work. 

• Why: Protects against threats from unsecured networks and ensures secure access for remote employees. 

14. Cybersecurity Insurance 

• What: Obtain cyber liability insurance to cover financial losses from breaches, ransomware, and lawsuits. 

• Why: Provides a financial safety net in case of cyber incidents. 

15. Regular Audits and Assessments 

• What: Conduct vulnerability assessments, penetration tests, and internal audits. 

• Why: Identifies weaknesses in systems and processes, allowing for proactive risk mitigation. 

16. Compliance Monitoring Tools 

• What: Use tools to monitor compliance with applicable laws and regulations (e.g., GLBA, FTC Safeguards Rule). 

• Why: Helps ensure that the firm remains in compliance with industry standards and avoids penalties. 

Why These Protections Matter 

• Client Trust: CPA firms handle highly sensitive financial data, so maintaining client trust is paramount.  

• Regulatory Compliance: Laws like the FTC Safeguards Rule, GLBA, and HIPAA require strong security measures. 

• Reputation Management: A breach can harm the firm’s reputation and lead to loss of business. 

• Financial Protection: Cyberattacks can result in significant financial losses from downtime, lawsuits, or regulatory penalties.  

By implementing these protections, CPA firms can significantly reduce their cybersecurity risks while enhancing their overall resilience. 

Need help determining the current state of your IT infrastructure so you can identify vulnerabilities? Structured Technology Solutions is offering complimentary IT assessments to CPA firms in preparation for “busy season.” We would much rather get a call from you NOW than at the beginning of April when your network crashes and you have no idea how to access your backups!