Shielding Your Firm's Bottom Line: Cybersecurity for Canadian Accountants

When an entire month is designated by governments around the world in order to raise awareness and education, you know that it is likely something worth taking notice of. October is Cybersecurity Awareness Month in Canada and abroad and was launched in 2004 to help organizations and the general public understand the importance of cybersecurity. The theme for this year is step up your cyber fitness. 

This year’s Cybersecurity Awareness Month comes at a particularly appropriate time, hot on the heels of several high profile and damaging cyberattacks, including Sony, MGM Resorts, and Clorox. There is a very good reason why over two-thirds of Canadian executives view cybercrime as their biggest threat.

The importance of cybersecurity in Canadian accounting firms cannot be overstated. With the increasing volume of sensitive financial data being stored and transmitted electronically, the risks associated with cyberattacks are higher than ever.

Accounting Firms Need to Be Especially Diligent About Cybersecurity

Due to the unique position accountants play in handling confidential information and the regulatory environment in which they operate, accounting firms need to prioritize and maintain a high level of cybersecurity vigilance and expertise to safeguard their clients' interests and their own business continuity. Cybercriminals often target accounting firms because of the valuable financial information they possess. 

Furthermore, a cybersecurity breach can have a significant financial impact on an accounting firm. The costs associated with remediation, notification, legal fees, and potential lawsuits can be substantial. Cyberattacks, such as ransomware, can disrupt a firm's operations, potentially bringing them to a standstill. 

A breach of client data could lead to severe consequences, including legal actions, reputational damage, and loss of clients' trust. Accountants rely heavily on their reputation and trustworthiness. A cybersecurity breach can tarnish an accounting firm's reputation, making it challenging to attract new clients and retain existing ones.

How Accounting Firms Can Step Up Their Cyber Fitness

There are several best practices that cybercrime experts recommend for optimal cybersecurity protection.

Ongoing Employee Training and Awareness

Human error is one of the leading causes of cybersecurity breaches. Train your staff, from partners to interns, in cybersecurity best practices. Ensure they understand the risks associated with phishing, social engineering, and other common attack vectors. Regularly update your cybersecurity training to keep employees informed about the latest threats and trends in cyberattacks.

Implement Strong Access Controls

Implementing strong access controls is essential to protecting sensitive financial data. This might include:

• Utilizing strong, unique passwords for each user – passwords should be at least 12 – 16 characters long, and a combination of upper case, lower case, numbers, and special characters
• Use a password manager (post-it notes covered in your various passwords is a major cybersecurity no-no) - Keeper, 1Password, and NordPass are all popular password keepers
• Consider implementing multi-factor authentication (MFA) for an extra layer of security
• Limit access permissions to the minimum necessary for each role within your firm, and 
• Regularly review and update these permissions as staff changes occur.

Secure Your Network Infrastructure

Your network is the backbone of your digital operations. To secure it, consider:

• Firewall Protection: Implement a robust firewall to monitor incoming and outgoing network traffic. Configure it to block unauthorized access and regularly update firewall rules.
• Intrusion Detection and Prevention Systems (IDPS): Deploy IDPS to detect and respond to suspicious network activity in real-time.
• Regular Software Updates: Keep your operating systems, applications, and security software up to date with the latest patches and updates to address vulnerabilities.
• Virtual Private Networks (VPNs): Encourage the use of VPNs when accessing your network remotely to protect data in transit.

Plan for When Disaster Strikes

Create a comprehensive data backup and recovery plan. Regularly back up critical data and test your backup systems to ensure they are functioning correctly. This can help mitigate the impact of a cyberattack or data breach by allowing you to restore essential information quickly.

Not only should your firm have a data backup and recovery plan, but consider preparing for the worst-case scenario by developing a comprehensive incident response plan. This plan will define roles and responsibilities for handling a cybersecurity incident, establish communication protocols, and regularly test the plan through simulated exercises. The ability to respond swiftly and effectively to a breach can significantly minimize the damage.

Consider Vendor and Third-Party Risk Management

It’s not enough to have your own house in order, you also need to consider who you are working with. Accounting firms often rely on various third-party vendors and software solutions. Ensure that your vendors follow stringent cybersecurity practices. Conduct due diligence and evaluate the security measures they have in place, as any vulnerability in their systems could pose a risk to your firm.

Regular Security Audits and Testing

And finally, schedule in regular security audits and penetration testing to identify vulnerabilities and weaknesses in your cybersecurity defenses. Engage with cybersecurity experts to conduct these assessments to ensure a thorough evaluation.

Stay Vigilant and Cybersafe

Firms in the Integrated Advisory Network (IAN) are used to tackling disruption head-on, and ensuring your cybersecurity practices are up to par is no different. Cybersecurity is not a one-time activity, but rather an ongoing effort. Staying vigilant and adapting to evolving threats is essential to keep your firm secure in the digital age.

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The Integrated Advisory Network consists of progressive CPA firms, along with best-in-class professional advisors, service, and product specialists, who work together to deliver an elevated and holistic client experience. One that optimizes both their personal and professional lives with an integrated financial strategy designed to help clients reach their goals.