The Role Of Accountants In Data Privacy

December 3, 2019
The Role Of Accountancy In Data Privacy

When talking about data privacy, the first thing that pops into our minds is businesses protecting their secrets. Younger people, on the other hand, think about the issues social media platforms currently face. However, did you know that data privacy plays a significant role in finances and accounting?

Accounting is, in simple words, the recording and managing your transactions to formulate and execute plans for your business’s growth. Financial records are like the diary of enterprises. Hence, your competition getting a hold of it is no different than telling them how to copy your processes. 

This fact has resulted in businesses actively trying to steal these records from each other. As an accountant, your client’s data being compromised can directly affect your firm, as well. You can read more about this through this article written by Amy Waldron, CPA, and David Hallstrom on the Journal of Accountancy.

A breach of client data: Risks to CPA firms

You walk into your office on a Saturday morning during tax season to find a staff member waiting for you with sweaty palms and a look of terror on her face. She takes a while to get the words out, but you soon learn that she backed up some client files to an unencrypted flash drive and dropped it in her purse before going to a “happy hour” the night before. 

Upon returning to her table from the restroom, she discovered her purse was nowhere to be found. She had been preparing payroll tax returns for several clients with multistate locations, and the flash drive contained payroll data such as names, Social Security numbers, addresses, salaries, and wages. Click here to read more…

After reading the article, one can assume that protecting your client’s data is important for both parties. Hence, it is crucial that, as a CPA, you actively learn ways to protect this data. This article by Joseph Wolfe explains how you can protect your client’s records when you have to share them.

When parties come knocking for client records

CPA firms either maintain or have access to numerous types of client records and related working papers. Requests for access to copies of such records can arise from multiple sources, including current and former clients, lawyers, civil and criminal investigators, lenders, and others. All requests should be made in writing.

The obligation of a CPA firm to respond to these requests is governed by professional standards, state board of accountancy regulations, state and federal law, and regulatory bodies. Before responding, a CPA firm should consider all applicable standards, statutes, and regulations. Click here to read more…

We’ve grown up watching movies showing hackers accessing computers to steal secrets. Being an accountant, it may feel like you are powerless against these attacks. Fortunately, there are ways you can prepare you and your client’s data stored in digital platforms. This article by Theo Callahan shows how you can protect your computer from hackers.

Keeping Secrets

As a CPA, you’re entrusted with loads of confidential information, and your professional reputation depends on your discretion. But your computer may be vulnerable to someone accidentally or maliciously prying into or tampering with that confidential data.

This article examines the dangers and ways to make your information more secure. Notice I say more secure because security is a relative condition: The higher the security, the harder it is for a meddler or a crook to access it; but it also becomes more difficult for you to access. So, as a practical matter, you probably need a level of security that keeps out the innocent meddler and all but the most determined and sophisticated intruder—yet still gives you access with relative ease. Click here to read more…

As we can see, it should be a top priority for accountants to implement measures to make sure that our clients’ data are safe. Aldaris CPA uses top-notch data security measures to protect your data. We offer quality services such as bookkeeping and tax preparation to business and individuals in the Seattle area. You can set an appointment with us by clicking here.