Accounting Cybersecurity: Keeping Your Financial Data Secure

todayApril 21, 2020

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accounting security

User permissions let you clearly define what tasks users can perform, approve, and have access to. See Wang et al. (2013) for a review of other academic studies on cybersecurity disclosure. If they aren’t contributing anything in labor, that demand is also inherently inflationary, Millar added.

Cybersecurity in accounting encompasses various practices and strategies that protect financial data confidentiality, integrity, and availability. Cybersecurity providers focus on safeguarding sensitive financial information, such as financial records, tax documents, client data, and other proprietary information from phishing attacks, ransomware, and data breaches. As the accounting profession becomes more intertwined with IT and cloud accounting, protecting financial data will take precedent. For instance, do this by educating your team on the growing threats and risks of a financial data breach and how to prevent ransomware attacks. In the same vein, accounting system security is critical not only for your accounting firm and your reputation but also for your customers. Accounting Seed values accounting security so much, we make it our mission to provide resources to help accountants and businesses protect their data.

IRS Security Six

Accounting professionals can increase their efficiency at work by earning online cybersecurity certificates. Cybercriminals often target small companies because they don’t have as many data security measures in place, leaving them open to attack. Because accounting firms deal with private financial data, small- to medium-sized accounting firms are attractive accounting security targets for hackers. In this article, we look at how accountants can structure an accounting cybersecurity strategy to keep financial data secure. We share tips to keep data secure and champion dual cyber security and accounting best practices throughout your organization. Also, we examine how cloud-based accounting software helps keep data safe and secure.

Edited by CPAs for CPAs, it aims to provide accounting and other financial professionals with the information and analysis they need to succeed in today’s business environment. This clear separation can significantly reduce the risk of a security breach compromising your work-related data. Some apps like Rewind let you automatically back up these financial accounts and your critical reports to protect you from possible accounting automation risk.

How to Protect Financial Data from Cybersecurity Threats

We will examine the application of cybersecurity in accounting in this article. All in all, partnering with a reliable cybersecurity provider offers numerous benefits for startups and SMBs in their respective journeys toward secure and resilient accounting infrastructures. With the confidence that their accounting systems are secure, companies can demonstrate their commitment to safeguarding sensitive financial information and build trust with clients. The increasing number of cyberattacks targeting accounting practices underscores the need for advanced security measures. Modern defense systems have to be agile and dynamic, as it’s the only way to protect your company and your clients in real-time.

accounting security

Accounting firms are bringing over their knowledge of internal controls, external reporting, and assurance to their cybersecurity practice. This creates an advantage over non-accounting cybersecurity consulting firms. Cybersecurity Ventures (2018), a research and market intelligence firm, lists 500 innovative companies known as the Cybersecurity 500 and all of the Big 4 accounting firms are ranked in the top 50. Once controls are in place, they must be regularly tested to ensure they are operating effectively. As alluded to above, accountants have significant expertise in control testing, as auditors opine on the operating effectiveness of public companies’ ICFR. In addition to testing ICFR, auditors test any additional controls that they believe reduce the risk of material misstatement in the financial statements.

A Guide to Software Maintenance Cost Estimation

Identity theft is a very real problem, but when a ne’er-do-well accesses your accounting system and puts your customers’ sensitive data at risk, it can spell doom for your business. In today’s tech-driven, interconnected environment, it is important to be aware of all of the places the firm’s data may potentially live. It is also important for firms to conduct a risk assessment to gain an understanding of their current security vulnerabilities. What is especially alarming is that financial services topped the list as the most attacked industry.

accounting security

Besides taking in specific accounting practices and regulations, examine your unique process to see where data slips may occur. These play a big role in defining additional functionality you need from an accounting system. As an accountant, you face threats like hacking, ransomware, and phishing scams, but internal threats and errors are just as compromising. Accidental data sharing can occur easily with untrained staff, and there are multiple ways data relevant to the financial lifecycle can be misplaced. It’s critical to analyze how your individual organization handles data and create accountability into your actual accounting practices for proper data management. 2020 saw a major shift to remote workstyles due to the COVID-19 pandemic, but an equal plague is the rise of cyberattacks.

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