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As you may already be aware, the Federal Trade Commission (FTC) has recently enforced new rules and regulations pertaining to the standards for developing, implementing, and maintaining reasonable administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of your customer data. This new regulation is known as the FTC Safeguards rule.
The good news is that If you store 100% of your data in the Cetrom Cloud Virtual Desktop, you are likely already compliant. Cetrom was founded based on the vision that businesses had to have an easier, more cost-effective way to manage their technology resources. Today, Cetrom is the leading cloud computing solution and technology services provider for firms of all sizes across multiple industries, and our philosophy remains customer-centric.
If you’re working with Cetrom, you don’t need to worry about non-compliance with the new FTC Safeguards rule. The recent release of Cetrom Connect provides clients an API solution to seamlessly meet the specified standards for secure network communications. However, if you allow your users to check their email on their mobile devices, use personal laptops for company use, scan documents from local PCs to the cloud, store customer data locally, or perform other everyday actions on personal devices, you must follow the standards, rules, and regulations to safeguard customer data and avoid penalties. This article provides an overview of the new rule, its implications for accounting firms, and tips for compliance.
Understanding the FTC Safeguards Rule
The FTC Safeguards Rule is outlined in section 501(b) of the Gramm-Leach-Bliley Act. It directs federal regulatory agencies to establish standards for financial institutions to ensure customer records, information security, and confidentiality.
The FTC Safeguards Rule is a regulation implemented by the Federal Trade Commission to ensure the protection and security of consumer information held by financial institutions. The rule applies to organizations that collect and maintain personal information about individuals as part of their business activities, including banks, credit unions, and other financial service providers. Under the Safeguards Rule, covered organizations must develop, implement, and maintain a comprehensive information security program to safeguard customer information's confidentiality, integrity, and availability. It should also protect against any anticipated threats or unauthorized access to this information.
Implications for Accounting Firms
The FTC Safeguards Rule carries several implications for accounting firms that qualify as “financial institutions” under the rule. If your firm falls under the jurisdiction of the rule (There are exceptions for firms with less than 5,000 clients), there are several things you should be aware of:
- You Have New Compliance Obligations: If an accounting and finance firm meets the definition of a financial institution under the rule, it must comply with the Safeguards Rule's provisions. This includes developing and maintaining a comprehensive information security program to protect the confidentiality and security of client information.
- You Must Perform a Risk Assessment: Accounting and finance firms must conduct a thorough risk assessment to identify potential risks to the security and confidentiality of client information they possess. This assessment should consider factors such as the sensitivity of the data, the firm's size and complexity, and the nature of its activities.
- You Must Establish an Information Security Program: Accounting and finance firms must establish and implement an information security program that addresses the identified risks. The program should include administrative, technical, and physical safeguards to protect client information from unauthorized access or disclosure. Examples of safeguards include access controls, encryption, regular employee training, and secure disposal of information.
- You Must Respond to Security Incidents Properly: Accounting and finance firms must have procedures to respond promptly to security incidents or unauthorized access to client information. This includes mitigating harm, investigating the incident, and implementing measures to prevent similar incidents.
It is essential for accounting firms to carefully assess their activities and consult experts to determine whether they fall within the scope of the FTC Safeguards Rule. Legal compliance with the rule helps protect client information, enhances trust, and reduces the risk of security breaches or unauthorized access. Although we cannot provide any information that qualifies as legal advice, here are a few tips on ensuring compliance with the FTC Safeguards Rule.
Ensuring Compliance with the FTC Safeguards Rule
In Accounting and Finance, ensuring Security and Compliance are paramount. To adhere to the FTC Safeguards Rule and maintain Legal Compliance, accounting firms must implement robust Cybersecurity Measures. These measures encompass administrative, technical, and physical safeguards. By adopting these measures, firms protect client information from unauthorized access and maintain confidentiality.
A crucial step in achieving compliance is conducting regular assessments to identify areas of non-compliance. This proactive approach allows accounting firms to pinpoint vulnerabilities and weaknesses in their systems and processes. Through these assessments, firms can take necessary actions to rectify gaps and ensure adherence to the FTC Safeguards Rule.
Accounting firms must implement necessary controls and security measures to fortify their security posture. This involves adopting policies, procedures, and technologies to address identified gaps. Strengthening access controls, enhancing authentication mechanisms, and implementing a need-to-know basis for sensitive information can be undertaken.
Fostering Data Security Awareness is crucial. Proper training on compliance practices and data security is essential. Employees should be educated on password security, secure data handling, identifying phishing attempts, and reporting security incidents. Well-informed employees are pivotal in upholding security protocols.
Maintaining compliance is an ongoing endeavor, requiring continuous monitoring and assessment. Establishing a robust monitoring program enables accounting firms to assess the effectiveness of security controls, monitor access to client information, detect potential security incidents, and ensure compliance with established policies and procedures.
By following these steps, accounting firms bolster their Information Security practices, mitigate the risk of data breaches, and demonstrate compliance with the FTC Safeguards Rule. This safeguards client information and instills trust and confidence among clients and stakeholders.
Leveraging Cetrom's Solutions for Compliance
One of the best ways to ensure that your firm maintains compliance with the FTC Safeguards Rule and all other applicable regulations is to work with a reputable third-party vendor. Cetrom Connect enables firms to meet FTC Safeguards, IRS, and GLBA network security standards while comprehensively linking local networks and cloud servers. Our API helps avoid costly penalties by providing:
- Multifactor Authentication
- Conditional Access for Authorized Users
- Centralized Management of Workstations
- Secure Data Accessed on Mobile Devices
- Single Sign-on Between Cloud & Local
- Eliminate Onsite Servers
- Endpoint Protection
Cetrom further offers customized, comprehensive IT solutions, from complete cloud migration and implementation to proactive managed services and round-the-clock support with 99.9 percent uptime.
Cloud computing offers businesses the convenience of accessing a comprehensive range of IT services on a pay-as-you-go basis, similar to how one would pay for utilities. This approach relieves companies from concerns about administrative tasks like licensing and security. It eliminates the requirement for maintaining extensive in-house IT departments and alleviates the burden of recurring capital expenses for hardware and software upgrades. Cetrom embraces this vision by acting as an extension of our client's IT departments, allowing them to prioritize what truly matters: their own business and customers.
Cetrom’s mission is the dedication to the highest quality of customer service combined with IT solutions that are leading-edge, affordable, and secure. If you’re interested in Cetrom's solutions for CPA firms, please email Sales@cetrom.com.
