Accounting firms have embraced technology and eased up the mechanics of doing business online today. Cloud computing, data management systems and exclusive client portals are the order of the day. However, electronic / physical records maintenance must be administered during a professional and confidential manner thanks to the varied standards & statutes regulating record retention.
Identity thefts or data breach can occur due to a lost or stolen device, hacking, fraud, improper disposal of knowledge, and errant email messages. A firm faces numerous exposures within the event of identity thefts such as:
Claim for damages – A client or third party can bring both direct claims and cross-claims for indemnification against the firm for damages incurred as results of the exposure.
Cost of compliance with state and federal statutes and regulations – additionally to the prices of compliance with state security breach notification laws, Online Accounting Services could also be subject to penalties for violations of federal statutes and regulations.
Reputational damage. A privacy breach, actual or perceived, may end in a loss of consumer trust that causes significant damage to the general public perception of a firm. which will harm business relationships, especially within the practice of public accounting, which may be a business during which trust and confidentiality are critical.
Network damage. Companies of all sizes are in danger for attacks on their computer networks. CPA firms are attractive targets thanks to their access to data which will be readily sold within the online black market. Intentional hacking attacks aren’t the sole danger. Malware, which is software designed to impair the operation of varied technological devices, are often introduced through email attachments or downloaded software.
Malware can disrupt computer operations, gather sensitive information, or gain access to non-public computer systems. It also can opened up from a firm’s system and damage clients’ networks. Some malware uses systems to host email spam attacks or to launch denial-of-service attacks.
If fraud is suspected or known to possess occurred, rapid assessment and damage mitigation are imperative. Evaluate the severity and scope of the incident, consult legal counsel regarding compliance with applicable notification laws and PR activity associated with the breach and notify potentially affected clients.
The less expensive approach is to implement robust data security measures.
Make sure that laptops, desktops, USB drives, servers, smart phones and other devices don’t contain any confidential data that’s unencrypted. Consider remote laptop security measures to stop access to protected files within the event of theft or loss. Make sure that email messages and attachments containing confidential data are encrypted with file encryption and digital certificates. Use strong passwords, and don’t write them down or share them. Passwords should be “salted” with random bits and symbols like #, $, and &. Physical security should be provided for computers and endpoints, like the other valuable assets, including building security and access codes, and locking up all servers, laptops, desktops and mobile devices.
Accounting firms should also engage during a continuous data security process emphasizing on risk assessment to spotlight vulnerabilities and a well-balanced information security plan with policies, procedures, staff responsibilities on protecting data and action just in case of breaches including regular staff training in order that each employee knows what the firm is doing and what he or she is required to try to to , including best practices for addressing new and continuing risks (e.g., social engineering, phishing and web application attacks). New laws or regulations should be reflected in changes to the plan. Training sessions to update staff on such changes will make the plan a dynamic, living document that staff uses and relies upon. Online Bookkeeping Services in Amarillo will avoid or reduce the high costs related to data breaches, and powerful data security measures will become selling points that a lot of clients appreciate.