Top 8 Cybersecurity Best Practices for Accounting & Tax Firms in Tax Season

Tax season can be a real headache, especially when scammers trick you into their schemes. It’s no secret that phishing, scamming, breaches, ransomware attacks, and other online frauds tend to skyrocket during tax season, so accounting and tax businesses must take security seriously. Did you know that in 2023, the average ransom cost boomed to $1.54 million?

That’s almost double the 2022 figure of $812,380. So, with large-scale data ransomware becoming a near-daily concern in the accounting world, the emphasis on security and compliance during tax season has reached unprecedented levels

Below are 8 security tips to help you avoid cyber threats and protect yourself against identity theft and financial fraud during tax season.

Provide Cybersecurity Training to Employees

Employees are often the weakest link in a company’s cybersecurity protection, especially the accounting and auditing team, which have many confidential files. And cybercriminals often exploit this vulnerability to gain unauthorized access to a company’s network.

Therefore, any cybersecurity plan must begin with the employees’ training on identifying potential threats and what to do if they encounter one. Firstly, you need to create awareness about the potential cyber threats that exist through regular training sessions, seminars, and workshops.

Employees should be taught about the different types of cyber threats, such as phishing attacks, malware, ransomware, and social engineering attacks, through training, demos, and webinars, irrespective of their role or position in the company.

Encrypt Sensitive Financial Data

Taxation firms deal with a vast amount of sensitive data, such as income statements, social security numbers, and financial transactions. Encrypting this data ensures that even if unauthorized individuals gain access to it, they won’t be able to decipher the information without the appropriate decryption keys.

Moreover, encryption is employed to secure communication channels. When taxation firms transmit data over the internet or other networks, encryption protocols such as SSL/TLS create secure connections. It prevents eavesdropping and man-in-the-middle attacks, ensuring the data remains confidential during transmission.

Also, encryption protects sensitive client information on electronic devices such as laptops, tablets, and smartphones. Many taxation firms are subject to industry-specific regulations and compliance standards.

Encryption is often a requirement for meeting these standards. For example, the General Data Protection Regulation (GDPR) and the Health Insurance Portability and Accountability Act (HIPAA) mandate encryption to protect sensitive data.

Regular Security Audits for Continuous Improvement

Proactive security audits are not just a compliance checkbox; they are a strategic initiative for continuous improvement in cybersecurity. Regular security audits of your infrastructure allow your accounting firm to identify and address potential vulnerabilities before they can be exploited.

It ensures that your firm’s cybersecurity posture remains resilient and adaptive to the evolving threat landscape, providing a solid foundation for secure tax preparation operations.

Opt for Incident Response Planning

Having a solid Incident Response Plan is like having a proactive shield against the unforeseen. Whether it’s a data breach, a malware attack, or any form of unauthorized access, the consequences can be severe -financial losses, reputational damage, and disruption of business operations. With a well-thought-out plan, you can quickly mitigate the impact of any incident, minimize disruption, and ensure business continuity.

Every firm needs a comprehensive plan that defines roles, establishes communication protocols, and outlines actions to be taken in a cybersecurity incident. Also, regularly update the incident response plan to align with cybersecurity threats and conduct tabletop exercises to ensure a coordinated response in case of a security breach.

Protect Data with Endpoint Protection and Anti-Malware

Tax season amplifies the need for resilience. Endpoint Protection and Anti-Malware solutions are not static; they evolve with the tax landscape. Regular updates, infused with the latest threat intelligence, fortify the defense, providing real-time protection during the heightened activity of tax season.

For accountants and tax firms, client trust is paramount. Endpoint Protection and Anti-Malware solutions, crafted with their specific needs in mind, protect data and serve as tangible assurances of robust cybersecurity practices. They ensure a vigilant watch against malware, ransomware, and other malicious intrusions that could compromise the confidentiality of financial data.

Update Your Systems and Software

In the world of tax firms, a crucial yet often neglected aspect of cybersecurity is keeping systems and software up to date. Regular updates create a virtual shield that addresses vulnerabilities and strengthens security. They act as the first defense against potential cyber threats that could compromise sensitive tax data.

These updates fix bugs and ensure compatibility with the latest technologies, fostering operational efficiency. For tax professionals, staying current is not just a best practice; it’s a proactive measure to secure digital assets, operating systems and regular updates during tax season.

Timely updates contribute to a resilient defense, reducing the risk of security breaches and safeguarding the integrity of financial information.

Keep Your Client’s Data Backed Up

Daily data backups protect against potential data loss due to unforeseen circumstances such as hardware failures, cyber threats, or accidental deletions. With a daily backup routine, accounting and tax firms can swiftly recover the most recent and accurate financial information in case of data corruption or system malfunctions.

In addition to performing daily backups independently, you may consider utilizing managed backup services. These services allow you to outsource the responsibility of data backups to a third-party provider, who will handle the backup process for you.

Managed backup services can be particularly useful for small businesses or those without dedicated IT staff, as they provide a cost-effective and reliable solution for ensuring data protection.

Additionally, many managed backup services offer features like automated backups, remote monitoring, and data recovery support, further streamlining your backup process and providing added peace of mind.

Embrace Cloud For Accounting And Tax Filing

The transition to cloud-based accounting and tax software introduces robust layers of security measures, surpassing traditional on-premises solutions, by employing advanced encryption protocols and built-in security measures, such as encryption and multi-factor authentication, to safeguard sensitive financial data against cyber threats.

The cloud’s centralized architecture enables real-time monitoring and rapid response to security incidents, with continuous system updates and patches seamlessly implemented by providers, mitigating vulnerabilities and fortifying defenses against evolving cyber threats.

It alleviates the burden on accounting firms and individuals so the accounting or tax team can focus on core financial activities while entrusting the intricacies of data protection to specialized cloud service providers.

In a broader sense, accounting or tax software on the cloud offers convenience, flexibility, scalability, and enhanced security, making them popular choices for individuals and businesses looking to simplify their financial processes while safeguarding their sensitive financial information.

We Are Your Security Partner for Accounting and Tax Applications

Ace Cloud is a trusted partner in cloud hosting solutions for QuickBooks, Sage, UltraTax, ATX, and more tax applications, providing data-backed assurance for an unparalleled security experience.

Our comprehensive security, supported by a 99.99% uptime guarantee and a track record of safeguarding millions of financial transactions, ensures your tax filing and accounting processes remain uninterrupted. With state-of-the-art encryption protocols, including 256-bit encryption, your client’s sensitive financial information remains confidential, meeting and exceeding industry standards.

Our seamless integration with 200+ tools optimizes your workflow, allowing you to focus on your core responsibilities in a secure environment. With 24/7 monitoring and support, our team of experts rapidly responds to potential threats, ensuring your digital infrastructure remains secure in real time.

Elevate your security posture with Ace Cloud’s assurance and let our strategic partnership support your business in the ever-evolving digital landscape. Start your cloud journey today!

Get in touch with our solutions consultant at +1-855-223-4887.