Top Cybersecurity Threats for Accounting Firms and How to Prevent Them

Introduction

Advancements in cloud computing and migrating sensitive financial data to cloud-based software have seen a rise in cybersecurity threats for accounting firms. Financial institutions must understand that the sensitivity and confidentiality of their database make them a top target. Therefore, carelessly clicking an unverified link with the company’s device can compromise the firm and cause data breaches within seconds.

This guide explains the leading cyber threats that accountants must watch out for to prevent granting access to hackers. What are these possible data breaches or IT security loopholes that expose your certified public accountant (CPA) firm to the risk of infiltration by cybercriminals?

1. Phishing Attacks

The common phishing technique by cybercriminals is sending a malicious email as if it were from a trusted source. This cybersecurity threat to accounting firms is to trick the recipient into clicking a link that might compromise their security frameworks. The hacker’s objective is to get them to divulge sensitive or highly classified information.

CPA firms must train their accountants on identifying phishing scams and security procedures like checking for possible spoofing or hovering over links to confirm the source. Additional security protocols include cross-checking the source through calls or other secondary verification methods before sharing confidential accounting data. Falling victim to a phishing attempt can lead to the download of corruptible data that infiltrates your cybersecurity walls.

2. Outdated Software and Patching

Running on outdated accounting software or security patches is another of the top cybersecurity threats for accounting firms. Large companies entrusted with multiple customer data must be ready to continually invest in the best cloud security tools.

Otherwise, they become easy targets to cybercriminals who can take advantage of the security risks of using outdated operating systems and cloud-based accounting software. End-to-end point encryption is also essential if you want to prevent risks of cyber hacking. Maintaining updated software, browsers and other financial tools makes it easy for your security service providers to identify potential data breaches before an issue occurs.

3. Ransomware

Imagine encrypting your files with a password and forgetting it. Well, that is how ransomware works. The only difference is this time, the cybercriminal is the one encrypting the accounting files or software. The objective of ransomware attacks is to corrupt financial systems, making the data impossible to access.

Ransomware hackers usually demand money as “ransom” which is tricky because paying the anonymous cybercriminals is likely another scam. There is no guarantee of receiving an encryption key from them. In severe cases of these cybersecurity threats for accounting firms, the hackers can threaten to destroy the data or leak it on unwanted databases. Common modes of ransomware cyber-attacks are phishing scams or downloading from untrusted websites. Unprotected downloads should never be carried out from your company’s computers.

4. Insider Threats

By “insider threats”, we refer to cybersecurity threats due to unsuspecting employees mostly through unsafe but unintentional actions. Examples include connecting personal work computers to a public network while working on sensitive data. Setting up weak passwords through which hackers can access other linked accounts also falls on the list of insider cybersecurity threats for accounting firms.

On the other hand, intentional cyber threats are when an employee or someone with privileged data access deliberately makes the security framework vulnerable to hackers. This could involve connecting a spoofed hardware or installation of malware. IT security departments can try employing the principle of least privilege to limit the possibilities of unintentional insider threats.

5. Cloud Security Vulnerabilities

Preventing the use of unauthorized devices to access financial information on an accounting firm’s database can reduce cloud security risks. This goes against the common “bring your own device” policy used in some organizations that work with very little sensitive information.

For accounting companies that use cloud-based software, managing sensitive customer information requires working on only recognized devices. This includes using only approved software or cloud computing platforms to access accounting data. Compliance with industry-regulated data policies is the best step to securing cloud-native applications from cybersecurity threats for accounting firms.

6. Third-Party Vendors

CPA firms should go beyond enforcing stringent cybersecurity practices within their accounting firewalls. Learning how to manage sensitive data with third-party vendors is equally important. Otherwise, it is like building a high fence but leaving a small passage without a gate. You must secure how third parties interact with your cybersecurity systems and the level of permission you grant them.

Another way to prevent third-party cybersecurity threats for accounting firms is to ensure they also have security compliance and incident response strategies. You can use cyber risk management auditors to assess fourth-party compliance. A zero-trust data access is also a continuous cyber risk assessment method to verify third-party access to security systems.

7. DNS Spoofing

Lack of DNS security extensions (DNSSEC) or poor encryption of your DNS traffic over HTTP or TLS can make it easy for cyber attackers to spoof DNS queries. DNS spoofing, also known as DNS cache poisoning, is a cyber threat where hackers corrupt the domain name system (DNS) to redirect traffic to a malicious website. Proper DNS spoofing scams are difficult to detect because the redirected website appears exactly as legitimate.

DNS spoofing cybersecurity threats for accounting firms usually aims to steal clients’ data like tax portal information or sensitive login credentials. Information from DNS spoofing scams could even be used for phishing to impersonate employees and intercept email communications or financial transactions.

Updating Employees on Cybersecurity Threats for Accounting Firms

Training your employees on the latest cybersecurity practices is important, regardless of whether you run a cloud accounting or traditional accounting system. However, CPA accounting firms on cloud-based solutions must be vigilant since they stand a higher risk of ransomware or malicious data access. The best cybersecurity practices include establishing hierarchical access to financial data among your employees.

Additionally, ensure that employees gain the necessary knowledge on how to identify cyber scams before they are granted clearance to more sensitive financial information.

Conclusion

Understanding the top cybersecurity threats for accounting firms is the first step towards preventing revenue or financial data loss to cyber scammers. This is why we encourage CPA firms to invest in continuous training programs for their accountants on the best cybersecurity practices.

The easiest way to avoid a cyber scam is to limit the possibilities by avoiding loopholes in your internal security frameworks. Data sharing with third parties and accessibility through outside devices must be controlled. Enforcing cyber safety practices is easier when you get started with our guide on overcoming the challenges of cyber resilience.