The importance of data protection in the accounting industry

When this article was first published in 2021, more than 75% of Canadian businesses were concerned about an increase in cyberattacks, but less than half were planning to increase their security budget for data protection and compliance.

These companies are risking a lot by putting off implementing cybersecurity solutions, because failing to protect sensitive data can result in significant fines and penalties and erode the trust of customers and partners.

Accounting firms possess a large amount of sensitive data and confidential information. As such, they need to be very well prepared to face cybercriminals.

In this article, our IT infrastructure management specialists explain the importance of data protection in the accounting industry and suggest ways to reinforce it.

The potential consequences of sensitive data breaches for accounting firms

For companies in the accounting industry, data protection is not only a matter of ethics, but also a matter of compliance. Accounting firms that do not meet the authorities’ data protection requirements will face repercussions.

For example, under the Personal Information Protection and Electronic Documents Act (PIPEDA), accounting firms can be fined $100,000 for improperly reporting a privacy breach.

Accounting firms can also be fined up to $10,000,000 for unsolicited commercial messages containing malware under Canada’s anti-spam legislation (CASL).

Accounting firms around the world can also face penalties of more than $60,000,000 if they violate the European Union’s General Data Protection Regulation (GDPR) by mishandling EU residents’ personal information.

In Québec, Law 25 (formerly Bill 64), whose requirements came into force in stages between 2022 and 2024, also requires firms to report confidentiality incidents and provides for administrative monetary penalties of up to $10,000,000 or 2% of worldwide turnover. Learn more about Law 25 compliance for SMBs.

Cyber threats (malware, phishing, ransomware, etc.) continue to present new risks. Since the Digital Privacy Act has expanded companies’ responsibilities under PIPEDA to include the obligation to report data breaches, repercussions for non-compliance may include litigation in addition to the fines mentioned above.

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How can accounting firms improve their data protection?

There are a number of strategies accounting firms can put in place to prevent sensitive data leaks, detect security breaches and report them to the Privacy Commissioner and those affected in an expedient manner.

Detection and surveillance

Canadian accounting firms can increase their IT system monitoring in order to detect security incidents as early as possible and address them quickly. Here are some examples of monitoring methods:

Outsource IT infrastructure monitoring

Most IT support companies today offer professional services for monitoring network hardware, devices and applications and keeping them secure.

Managed IT service providers small and large can assist or even replace an accounting firm’s IT department. By outsourcing these tasks, accounting firms can free up internal resources to focus on day-to-day operations while cybersecurity specialists stand guard.

Implement multi-factor authentication

Multi-factor authentication (MFA) is a secure authentication method that requires users to provide at least two pieces of evidence in order to access a program, function or confidential accounting information.

This cybersecurity strategy provides a higher level of data protection than single-factor authentication (SFA) methods, where the user only has to provide one piece of information, such as a password or access code.

By requiring several separate authentication factors, MFA makes it more difficult for cybercriminals to impersonate an authorized user and gain access to computers, online backups and other sensitive resources. Even if hackers obtain a password, they won’t have the second element required to gain access.

Install effective antivirus software

Antivirus software continuously scans computer memory for malware and automatically removes it. It provides centralized control and a way to monitor the entirety of an accounting firm’s network.

Antivirus software can give even SMEs the ability to manage their security in a centralized way. The best tools also offer protection against ransomware, keyloggers and rootkits in order to prevent and detect some of the types of attacks that can be most damaging to businesses.

Training employees and raising awareness

Studies have shown that 95% of cybersecurity breaches are the result of human error. That’s why it’s important for accounting firms to train their employees on the importance of data security.

It may also be prudent to train accountants to develop work habits that do not expose confidential information unnecessarily. This is particularly important for employees who work remotely.

Accounting firms can rely on Groupe SL to protect their sensitive data

In conclusion, cybersecurity and data protection are vital for accounting firms, because cyberattacks can expose them to severe financial penalties and damage their reputation. Accounting firms should therefore implement effective cybersecurity measures and make sure that their staff is aware of the issue.

If you need assistance protecting your accounting firm from cyber threats that could cause sensitive data breaches, contact our team of cybersecurity specialists! We’ll be happy to discuss your needs and propose appropriate solutions to strengthen your company’s cybersecurity.