Accountants and CPAs must understand the importance of adhering to measures that protect clients’ data. Cybercrime is a real threat that can cause significant financial losses and reputational damage if not taken seriously. That’s why it’s essential to understand cyber security for accountants. CPAs can work with an experienced cybersecurity Managed Service Provider (MSP) and much more to safeguard themselves from cyber attacks. Read on to learn more about improving cybersecurity for CPAs and accountants.
Why Are MSPs Important for Cyber Security for Accountants?
An MSP (Managed Services Provider) provides round-the-clock monitoring so that accountants can have peace of mind knowing that their networks are being monitored 24/7 for any suspicious activity. An MSP also has the expertise needed to detect any weaknesses in your system before they become exploited by cybercriminals. They will ensure your systems are up-to-date with the latest security patches and can provide accountants with a comprehensive incident response plan if a breach does occur.
If a taxpayer suspects that their personal data may have been compromised due to a security breach involving a tax return preparer or online provider, then they should contact the FTC or IRS immediately for assistance. Protecting taxpayer data is a serious matter, and everyone must do their part in ensuring sensitive information remains safe at all times. By following FTC Safeguards Rule and IRSA Publication 1345, professional tax return preparers can help keep taxpayer data safe and secure.
How MSPs Help During a Breach
In the event of a data breach, an MSP works with accountants to help mitigate the damage by quickly identifying and containing the source of the attack while protecting client data. This enables accountants to demonstrate their commitment to providing secure services to clients and helping ensure that sensitive information is not compromised. By partnering with an experienced MSP, accountants can be sure that they are taking all necessary steps to protect their networks from cyber threats. This helps accountants keep their reputation intact and safeguard them from financial losses associated with data breaches.
It is essential that accountants take the threat of cybercrime seriously and invest in the latest technologies to protect their data. Working with an MSP is an important step accountants can take to ensure that their networks remain secure.
Another thing you must keep in mind is the severity of the sanctions put into place in 2020 by the California Consumer Privacy Act (CCPA).
The California Consumer Privacy Act of 2018 (CCPA) gives consumers more control over the personal information that businesses collect about them and the CCPA regulations provide guidance on how to implement the law. This landmark law secures new privacy rights for California consumers, including:
- The right to know about the personal information a business collects about them and how it is used and shared;
- The right to delete personal information collected from them (with some exceptions);
- The right to opt-out of the sale of their personal information; and
- The right to non-discrimination for exercising their CCPA rights.
All businesses — including accounting firms — are required by law to give consumers due notice explaining their privacy practices.
In fact, professional tax return preparers must adhere to FTC Safeguards Rule, which requires them to create and enact written information security plans to protect taxpayer data. By doing so, they ensure that their clients personal data and financial information is secure and private. Furthermore, online providers of individual income tax returns are held to the six security and privacy standards in Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns.
Taxpayers have a right to expect that their sensitive financial information will be handled responsibly. It is the responsibility of the professional tax return preparer or online provider to take the steps necessary to protect taxpayer data as required by FTC Safeguards Rule and IRSA Publication 1345. Failure to do so may result in FTC investigation. Protecting taxpayer data is not only the law, but also essential to maintain trust and confidence between providers and their clients.
Taxpayers can rest assured that when they entrust their financial information to a professional tax return preparer or online provider, their data will be secure and protected in accordance with FTC Safeguards Rule and IRSA Publication 1345. It is important for taxpayers to make sure that the preparer of their choice is compliant with these regulations and takes proper safeguards against cybersecurity threats related to handling taxpayer data.
Wrapping Up – Cyber Security for Accountants and CPAs
By taking all the necessary steps to protect taxpayer data, professional tax return preparers ensure that both individuals and businesses are able to have faith when sharing sensitive financial information. This trust is essential for the financial services industry to function properly. The FTC and IRS are committed to protecting taxpayers from data breaches, identity theft, and other security issues related to processing their tax returns. It is up to professional tax return preparers and online providers to ensure they are compliant with FTC Safeguards Rule and IRSA Publication 1345 so that they can continue providing secure services to their clients. Cyber security for accountants can be a complex situation, but it is imperative that all CPAs maintain high levels of security.
Remember Kirkham.IT offers a free risk assessment for individuals and small businesses. It’s never too early to get off on the right start when it comes to cybersecurity. Contact us today to book a free 30-minute assessment. Stay vigilant.
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