As an accounting firm owner, do you feel that the line between data security and business growth is a tightrope?
It is common to feel like you need to focus more on one over the other. With the next tax season approaching, that feeling becomes even more pronounced. However, dealing with the accounting data of multiple clients requires taking responsibility for keeping it protected. It is not just essential for business but is required by law. This is where IRS compliance comes into the picture.
Before we get to the IRS compliance requirements for CPA firms, let’s analyze the degree of risk involved.
Numbers Around Data Security That Speak Volumes
- A Clark School study quantifies the near-constant hacker attacks on Internet-connected systems by saying a hacking attempt happens every 39 seconds.
- Around 4,00,000 of the total accountants and auditors in the U.S. were at risk of a hacking attempt.
- The average cost of a data breach to an SMB ranges from $0.12 million to $1.24 million.
Besides this, CPA firms that do not invest in protecting the data they handle for their clients may be liable to pay fines and other compensatory damages. A single slip in terms of data security can destroy a firm’s reputation in the market.
Wondering how you can stay on the safer side? First, you must know and follow the IRS compliance requirements without fail.
What’s in New IRS Security Requirements for CPA Firms Like Yours?
The IRS, in 2019, set six areas where CPA firms must comply to avoid legal complications. With these IRS compliance requirements being a part of the law, you need to know them in detail. Besides this, you should also know that complying with these regulations won’t be easy or static. With the change in threats, IRS compliance requirements may also change in response.
More About IRS’ ‘Security Six’
Here, the key to the antivirus effort is to stop or limit the damage a cyberattack can cause. With the rise in anytime-anywhere data access, new security threats have come up. This requires you to develop a stringent policy for remote data access and sharing through various collaboration tools. On a similar line, a successful email spam filter is also a necessity.
For data protection, you might have deployed firewalls at both server and software levels that are proven to keep the network traffic safe. However, it is also essential to keep these firewalls updated as a part of the comprehensive security effort. In addition to the firewalls, you can invest in Intrusion Detection/Prevention System (IDS/IPS).
Losing a client’s data saved in a USB stick without encryption can lead to disastrous consequences. This is what makes drive encryption a near-absolute necessity. Using renowned remote access technologies like Citrix, you can also avoid data loss without PC or device encryption.
Two-factor or dual-factor authentication requires authorized users to sign into their accounts using more than a single login method. It is like an additional layer of security to deal with the risk of unauthorized access to your client’s confidential data. It will prevent hackers from accessing your firm’s network even if they obtain a user’s password.
Both virtual and physical backups are quite crucial for your accounting firm. This IRS compliance requirement talks more about digital backups for protecting and preserving business-related data. Data loss resulting from a system failure or data theft is quite a big issue for accounting firms, which is where you need a solution that can provide periodic data backups.
Virtual Private Network (VPN)
You also need to set your employees with access to VPNs for secure data access in a remote working environment. Since a standard Wi-Fi connection gets easily compromised, the WPA2 access standard is mandatory. You can also use an additional DMZ wireless network to add another layer of security.
Let Verito Technologies Handle Data Security Compliance for Your CPA Firm
When there are so many sides to your business, ensuring the complete security of clients’ data may seem overwhelming. This is where you can benefit from Verito’s cloud solutions and managed security services. We will help you minimize the legal burden of data security while benefiting your firm with remote access to accounting software, enhanced team collaboration, cost savings, and more.
Thinking of IRS compliance requirements more than you should? Call our experts to discuss your business needs today!