Financial technology (Fintech) is the lifeblood of accountants these days. Whether accountants work for private clients or operate services for larger firms on a public level, they need the tools, software, and technology for accurately and quickly tracking finances and auditing systems.
But now, facing a digital landscape plagued by more cybersecurity threats than ever seen before, accountants must make cybersecurity one of their top priorities. The shift to remote work caused by the COVID-19 pandemic increased the risks faced from both inside and outside a network. To manage these threats, Fintech systems have to adapt.
So, what methods are private accountants using to keep their system safe? And how do these efforts compare to those used by larger accounting services?
The answers to these questions can help determine your own accounting or security needs. Here, we’ll compare cybersecurity methods between both private accountants and accounting services.
Private Accountant Cybersecurity Methods
When we talk about private accountants, we usually mean those employed by a singular client, usually within a company to order and review all financial information. These are individual workers or small teams that dedicate their time and efforts toward preparing and analyzing reports, reviewing business finances, and ensuring that small businesses adhere to federal income tax regulations, such as payroll and excise taxes.
When it comes to cybersecurity, the methods these private accountants employ differ in scope and efficiency.
Because cybercriminals now target small businesses and individuals at increasing rates, maintaining an effective layer of digital hygiene is essential for private accountants. While these workers typically do not have the resources to employ a cutting-edge cybersecurity system, they take the following steps to protect themselves and their businesses:
- Protect email accounts with secure passwords and avoid phishing scams.
- Use a Virtual Private Network (VPN) to secure their data from malicious intruders..
- Apply firewalls and Secure Socket Layers (SSL) to business and personal networks.
- Backup data on encrypted drives.
Like any approach to cybersecurity, nothing is truly a guarantee against the dangers of cybercrime. This unfortunate reality means none of our data is ever as safe as we would like. However, the methods used by private accountants come with their benefits and their drawbacks.
Fortunately for private accountants, they typically face less risk than larger, potentially more valuable targets. This reality makes their cybersecurity methods effective for the following reasons:
- Reducing human error can prevent up to 88% of security breaches.
- Secure sites make private networks less of a target.
- Backed-up data on encrypted drives help mitigate the risks posed by ransomware.
Unfortunately, by the same token, private accountants fall prey to a wide number of attacks and schemes. These are some of the drawbacks of their methods:
- No matter how extensive the cybersecurity training, accountants can still fall victim to phishing attacks.
- Malware can infiltrate network firewalls and allow the bad actors to steal valuable data.
- Small firms lack the strong IT support needed for comprehensive protection.
With these risks (and more) constantly a factor for most private accountants, it is a matter of when rather than if a cyber-attack will be successful. This, of course, is true for just about any cybersecurity system. Because of their limited range of clients, however, private accounting firms usually face less risk, so any measures they provide can go a longer way than their counterparts in the public accounting service market.
Accounting Service Cybersecurity Methods
A public accounting service differs from the processes of a private accountant in a variety of ways. First, they are broader and therefore more open to attack. From large public accounting firms down to individual Certified Public Accountants (CPAs), these services from men and women offer reviews of financials for public disclosure. They can prepare tax returns, complete audits, and serve as consultants wherever finances are concerned.
When it comes to cybersecurity, their efforts are often more standardized and thorough than those of private accountants. Because they serve more clients, the reputation of the accounting service itself hangs in the balance, whereas a private accountant isn’t always expected to be a cybersecurity expert.
As a result of higher stakes, public accounting services often adopt more high-tech and stringent methods in keeping information secure. These methods include:
- Protecting all logins with strong and frequently changed passwords.
- Educating all staff on cybersecurity awareness and best practices.
- Using anti-phishing software and firewalls to prevent human error.
- Backing up all systems to prevent data loss and ransomware attacks.
- Implementing incident response plans across the service.
Since the IRS and many local regulations require security provisions like the above from accounting firms, these methods are increasingly the norm. But while these best practices might offer some reprieve and preparedness against cyber-attacks, they cannot fight all of them off. As you’d imagine, these methods come with their own pros and cons.
A comprehensive and government-enforced approach to cybersecurity makes public accounting more cognizant of cybersecurity. Naturally, this offers some security benefits. These include the following:
- Accounting services maintain cultures of cyber defense.
- More resources are available to better protect networks.
- Accountants have to view cybersecurity as a staple of their profession.
Because accounting services rely entirely on being able to gain public support through their clientele, every public accountant has a vested interest in cybersecurity investments. But more eyes on their methods can also create more risk.
Facing a digital marketplace in which cybercrime is up an estimated 600%, accountants have to navigate attacks from every possible access point. Public accounting services are put more at risk simply by their broader presence. Government regulations don’t always help. Here’s why:
- Legal standards can set a weak baseline for cybersecurity goals.
- Accounting firms present a larger target, especially if data is stored on a central network.
- More clients make for more access points and vulnerabilities.
No cybersecurity approach is perfect. With more resources and know-how, accounting services can innovate with more powerful technology like blockchain for safe and decentralized triple-entry methods. However, bad actors have proven time and again that no system is truly safe from a cyber-attack.
Both private and public accountants must make the most of their efforts, then, playing off their strengths and preparing for the worst.
Comparing cyberSecurity and accounting
Accounting is one of the 15 fastest-growing fields in the U.S. job market. This is because no matter how much we can automate accounting tasks, a human perspective is needed to assess processes and risks, including cyber threats. Accountants are needed even more since cybersecurity now occupies much of their roles.
As both private accountants and accounting services make use of employee education, protective software, and data back-ups, we can all feel fairly safe in the privacy of our financial data. Yet, cybercrime is still a national and cybersecurity threat. Without comprehensive Fintech that helps to negate the risks of human error and system vulnerabilities, malware infections and data breaches remain a likelihood.
Though different in scale and oversight, the security methods used by both private accountants and accounting services have a long way to go.