Is your CPA Firm at Risk to Cyber Attacks?


As collectors of financial information, Cpa firms are entrusted with the personal financial data of their clients. Because of this, they become primary targets for cybercriminal attacks. Firms of any size may fall victim. In fact, more than half (55%) of the small businesses that were surveyed have already fallen victim to a cyber attack.

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The types of cyber risk varies. First-party risk impacts the accounting firm or practice directly, meaning the potential  data loss is directly correlated to lost business income. Third party risks, on the other side, rise from a security breach in the Cpa’s duty to care for others. These risks are triggered by the unauthorized disclosure of clientele’s private and personal information or by infections of a client’s network which results in data corruption.

Other cyber security risks to CPA’s include regulatory actions by federal and state agencies, reputational hurt and ancillary expenses related to complying with breach response laws. As of now, 48 states have data breach notice requirements, averaging in at a cost of a breach response of over $200 per subset of information. In addition, HIPAA requires notification in the event of disclosure of unsecured personal health information, while the recently enacted New York State Data Security Regulations set forth a framework that financial institutions operating within the state must follow to maintain data security.

In order to successfully avoid a cyber threat, one must first understand the mindset behind the motivation of cyber criminals. While some hackers are teenagers hanging out in their parent’s basement, many are unemployed coders or nation/state sponsored paramilitary groups lurking on the deep web. Here they exchange trade information and sell stolen data. Some are part of traditional methodologies, such as hacking into networks to steal data. Meanwhile, others manipulate users through phishing schemes to retrieve access to a system. Regardless of their motives, from mischievous, to malicious, to money laundering schemes, cyber criminal s can seriously  threaten your firms continued success and profitability.