In today’s digital age, accounting data has become a vital foundation for financial health. Yet, for Certified Public Accountants CPAs advising clients, this data presents a double-edged sword. While it fuels informed decision-making and compliance, it also exposes clients to significant cyber risks and compliance obligations.
Even recently, countless headlines have shed light on the cyber attacks on major global organizations like Sony, eBay, and Samsung. However, it’s essential to recognize that entities of all sizes encounter similar cyber threats. Although many are still grappling with cybersecurity challenges, there’s a growing acknowledgment of the need to address them effectively.
So, let’s discuss what cybersecurity threats are being faced by today’s businesses and as a CPA, what advice you can give to your clients to keep their data protected.
Read on.
Why Cybersecurity Matters for CPAs Advising
For CPAs, the landscape of IT security & compliance is a central pillar of their professional services. For them, ensuring the highest standards of data protection and adherence to regulatory frameworks is imperative.
CPAs are basically custodians for a vast amount of sensitive client data. It is evident that the very nature of accounting data makes it a prime target for cybercriminals. It often includes a a lot of Personally Identifiable Information (PII) and Protected Health Information (PHI) i.e. social security numbers, bank account details, tax returns, medical records, etc.
Cybercriminals can exploit this treasure trove of sensitive data for financial gains. They can exploit your business via identity theft, fraud, or even the sale of information on the dark web.
CPAs advising their clients have a fantastic chance to stress the importance of taking essential measures to enhance their cybersecurity.
Top 5 CyberSecurity Issues and Challenges for Businesses
- The growing reliance on cloud-based accounting software, remote work environments, and interconnected databases create a broader attack surface for malicious actors.
- Growing potential for human error as social engineering tactics like phishing emails can be particularly successful in the absence of cybersecurity best practices.
- Smaller businesses (SMEs) may struggle to allocate sufficient resources towards robust cybersecurity solutions, so they may create exploitable vulnerabilities.
- Regulatory fines and legal action from regulatory bodies due to non-compliance with data protection laws.
- Reputational damage leading to a loss of client trust and future business opportunities.
The combination of factors such as:
- Sensitive data handling,
- Expanding digital footprint,
- Human error susceptibility,
- Resource limitations,
- And others
make today’s businesses highly susceptible to cyberattacks with potentially devastating consequences.
Understanding the Cyberstorm: Rising Threats in the Financial Sector in Numbers
The financial sector is facing a perfect cyberstorm of rising attack rates. The sophisticated threats are increasing and a complex regulatory landscape is also surfacing alongside.
Here’s a breakdown of the key challenges with some recent, attention-grabbing examples:
1. Rising Cyberattack Rates
Financial institutions are prime targets for cybercriminals in 2024. Recently, a major credit card processor, Worldpay, suffered a data breach, exposing millions of customer accounts.
2. Sophistication of Attacks
Cybercriminals are constantly evolving their tactics. Beyond basic phishing scams, a recent attack involved exploiting a zero-day vulnerability (a previously unknown software flaw) in banking software used by SolarWinds. It allowed attackers to steal millions before the vulnerability was patched. So, the learning from here is, traditional security measures are struggling to keep pace.
3. Impact on Small to Medium Enterprises (SMEs)
Large fintech organizations have the resources to invest in robust cybersecurity, but SMEs are often left more vulnerable. A local credit union in Des Moines fell victim to ransomware in Jan 2024. It forced them to temporarily shut down operations. This incident highlights the devastating impact cyberattacks can have on SMEs.
4. Regulatory Pressure
Finance regulators are imposing stricter cybersecurity requirements on institutions. The recent hefty fine levied against Credit Suisse for non-compliance with data protection regulations in Europe is a prime example in this regard.
5. Insider Threats
Disgruntled employees or, even, those with access to sensitive data pose a significant security risk. A recent case involved a bank employee at JPMorgan Chase who used their access privileges to embezzle funds and sell it on the dark web. This emphasizes the need for robust internal controls and employee training.
6. Digital Transformation Risks
Financial services are rapidly adopting new technologies like cloud computing and mobile banking. So, the attack surface is also expanding. A recent vulnerability in a popular online banking platform, Mint, exposed customer accounts for weeks before a patch was available. That means the finance world needs a reevaluation of security strategies.
7. Customer Trust and Loyalty
Cybersecurity breaches can shatter customer trust. In the wake of a major data leak at Equifax, the company saw a significant drop in customer accounts and assets under management.
Key Areas of Focus for CPAs Advising Clients
Digital Supply Chain Security
The role of CPAs in helping clients secure their logistics and distribution networks from cyber threats:
- Risk assessment within logistics and distribution networks.
- Compliance guiding for adhering to relevant cybersecurity regulations.
- Advising on secure collaboration with third-party suppliers and partners.
- Incident response planning to respond to and recover from cyber incidents.
- Continuous monitoring for ongoing surveillance of the digital supply chain.
- And More
Online Banking Security
- Best practices for securing online banking and financial transactions.
- Implement strong authentication including MFA for added security layers.
- Ensure websites use HTTPS and advise clients to avoid public Wi-Fi for transactions.
- Encourage frequent account reviews to detect unauthorized transactions early.
- Keep banking applications and security software up to date.
- Train users to recognize and avoid phishing attempts.
- And More
Mergers and Acquisitions Security
- The importance of safeguarding Active Directory assets and ensuring data privacy during organizational changes.
- Evaluate and secure AD configurations pre-merger to prevent unauthorized access.
- Ensure all data handling meets legal standards, especially in cross-border transactions.
- Conduct thorough cybersecurity assessments of the merging entities to identify and mitigate risks.
- Develop a clear strategy for securely merging IT systems and data.
- Regularly audit the combined entity’s security posture to safeguard against new vulnerabilities.
- And More
Regulatory Compliance
CPAs advising clients on regulatory compliance, especially around NERC CIP standards, need to focus on:
- Understanding Regulations: CPAs dive deep into the specifics of NERC CIP and other regulations, ensuring they can offer detailed advice.
- Risk Assessment: Identifying areas where clients might be at risk of non-compliance.
- Customized Strategies: Developing customized compliance strategies that align with the unique needs of each client.
- Ongoing Education: Keeping clients informed about regulatory updates and new compliance requirements.
- Technology Utilization: Advising on technology that can streamline compliance processes.
The Importance of Regular IT Security Audits and Assessments
- Regular audits help identify and patch vulnerabilities before they can be exploited. Studies show that the majority of breaches exploit known vulnerabilities that have not been patched.
- With regulations like GDPR and SOX enforced, non-compliance can result in hefty fines. Audits ensure your accounting practices comply with these evolving standards.
- Given that the average cost of a data breach is in the millions, regular security assessments are cost-effective in preventing potential financial losses.
- In an industry where trust is the most important asset, demonstrating a commitment to cybersecurity can differentiate a firm in a competitive market.
Key Indicators of Compromised IT Security and Compliance Gaps for CPAs
- Unexpected account activities like logins at odd hours.
- File changes in sizes, types, or locations.
- A significant spike or drop in network traffic.
- The presence of unrecognized software or processes running on a system.
- An increase in security alerts from antivirus or intrusion detection systems.
- Failing to meet audit standards or having repeated deficiencies in audit reports.
- Inability to meet regulatory requirements, reflected in legal penalties and fines.
- Variations in data encryption, storage, transmission practices, etc.
These indicators are grounded in industry reports and cybersecurity research. So they are good harbingers of the critical need for vigilant security efforts and regular audits.
Criteria for choosing the right IT security and compliance service provider
- Industry Experience and Expertise: Choose MSPs with a proven track record in your client’s business niche.
- Certifications & Qualifications: Look for MSPs with well recognized certifications e.g. ISO/IEC 27001, CISSP, etc.
- Technology and Methodology: Evaluate their use of advanced security technologies i.e. Artificial Intelligence, Machine Learning, etc.
- Compliance Knowledge: Select MSPs with extensive experience with managing regulatory issues relevant to your client’s business.
- Customer References and Success Stories: Seek testimonials and case studies demonstrating successful compliance solutions.
- Incident Response & Communication: Ensure they offer a robust incident response plan, with clear communication protocols for when security breaches occur.
- Commitment to Continuous Improvement: Choose a provider that invests in ongoing research and development.
5 Tips for Choosing the Right IT Staffing Agency
Windows Management Experts
At WME, we prioritize top-tier IT security and compliance services that align with the essential criteria CPAs seek.
Our team is highly qualified as we boast nearly all relevant certifications and extensive experience in various industries. We utilize advanced technologies for effective threat detection and response, and ensure our solutions are sophisticated enough to tackle modern threats.
Partner with WME for a straightforward, professional approach to protecting your business.
Conclusion:
The finance sector stands at a crossroads. Look at this recent statement from the American Institute of CPAs.
As the world becomes increasingly digital, cybersecurity is not just an IT issue, but a strategic business issue that requires the attention of every employee.
- AICPA
The statement emphasizes the pervasive impact of cyber threats and the collective responsibility within firms to safeguard data. By acknowledging the growing threats and taking proactive measures, fintech organizations can weather the perfect cyberstorm we just talked about.
WME Managed Services
Our MSP services excel in providing cutting-edge IT solutions specifically designed for SMEs and other MSPs, focusing on:
- Advanced Security
- Compliance Expertise
- Operational Efficiency
- Expert Support
Partner with WME to elevate your tech capabilities. Let us handle your IT complexities, so you can focus on growing your business. Discover the WME difference today.
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The Solutions Partner badge highlights WME’s excellence and commitment. Microsoft’s thorough evaluation ensures we’re skilled, deliver successful projects, and prioritize security over everything. This positions WME in a global tech community, ready to innovate on the cloud for your evolving business needs.
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