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Financial data, including banking information, accounting, and tax details, are vulnerable to theft and security breaches. Given the high volume of detailed financial data that accounting firms manage, data security should ideally form an essential element in accounting operations.
A report in the Journal of Accountancy says that accounting firms are a top target for cybercriminals because of their access to financial and other personal client data. Cybersecurity breaches are estimated to cost businesses as much as $1.5 trillion annually.
However, like most businesses, accounting firms often choose diverse safety practices and programs. Business size, customer profile, demographics, and requirements all play a crucial role in determining the data security approach taken by accounting firms.
However, the one fact underlining these differences is that data security needs to be taken more seriously. Here are some reasons why accounting firms must consider data security as a critical requirement:
Any breach in data security can jeopardize sensitive financial information belonging to an accounting firm or that of its clients. This can negatively impact existing businesses, trust, and goodwill at a large scale, in addition to threatening business continuity and sustainability.
Because accounting firms handle a high volume of financial data, implementing data security and safety provisions is critical to ensure that breaches do not occur.
Human error may not be entirely avoidable. Studies report that 80 percent of breaches are caused by human error.
Some of the steps to reduce such mistakes include implementing better security practices, using safer software, and deploying consistent and timely data safety measures, including automation of high-volume and attention-intensive tasks like invoicing, inventory tracking, and payroll.
Data breaches can lead to even more severe issues. These include unintentional fraud, which can then lead to the accounting firm losing credibility, customer trust, and eventually, their business. Furthermore, cyberattacks such as phishing and hacking can also constitute major risks to data security. Malware is also a massive threat to accounting data as attacks can leave data encrypted or leave entire computer networks incapacitated through infection.
Data security measures do not need to be expensive. If handled professionally, data security and the necessary backup and storage solutions can offset the investment made by businesses, thus helping them thrive and become profitable.
Given the critical nature of accounting data, investing in professional assistance can help accounting businesses gain the data security they need to protect client data. Professional assistance can take over data security in the following ways:
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