Accounting firms face mounting pressures this year and next to protect their data with more vigor than before. The increased need for more protection is due to the sheer number of records that are exposed every year and a recognition that something needs to be done to stop it. This kind of problem will not go away on its own. For accounting firms, it is not only your clients that you have to answer to when it comes to a breach but the SEC, too. According to Bloomberg Tax, the Securities and Exchange Commision (SEC) will be looking for disclosure updates this year, which means that companies that experienced a breach will be held accountable. Considering many firms are not sure what is expected of them or even aware of what regulations they are required to follow, there may be many that will face repercussions.
Expectations
From a client perspective, the need for more protection doesn’t seem like too large of a request. They just want their personal information stored away safely where no one can access it and possibly use it. However, since accounting firms hold much of the information hackers are looking for, they are a prime target. Firms have begun to recognize this and take action.
According to Accounting Today, a study of 800 firms found that data and IT security was found to be a top-five challenge for large, medium and small firms. And in the next year, all of these companies plan to spend more on technology.
This comes as the SEC plans to become more aggressive about regulations and requirements for the financial sector, according to Security Boulevard. Keeping up with the current regulations can be hard since regulations come from the city, state and also federal level. In an ever-changing environment, a firm has to keep up or be left behind and vulnerable. As of now, expect harsher punishments for firms who are not actively protecting their clients. There is a bill making its way up that would impose fines and possibly even jail time for executives of companies that are found to not be protecting their clients’ privacy and data. This bill would not come to a vote for a while, if it ever got to that point, but the takeaway is that the SEC is looking to hold firms accountable.
Conclusion
Accounting firms have been slow to adopt cybersecurity that effectively protects their clients to the fullest, but the recognition that it is important will be a step in the right direction. Small and mid-sized firms should have this as a high priority since smaller companies have been targeted before. As more regulation and accountability are imposed by the SEC, firms will have to catch up or face the punishment.
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