April 29, 2021

How to Conduct a Cybersecurity Audit for Your CPA Firm

CPA firms are very familiar with audits. Usually, their audits concern the IRS and taxes. Unlike an IRS audit, cybersecurity audits are often done internally to test a security system’s strengths and weaknesses. A cybersecurity audit can boost a CPA firm’s security measures by finding vulnerabilities and correcting them before hackers have a chance to expose them. At Cetrom, our security experts work exclusively with CPA firms and we’ve learned a lot about conducting cybersecurity audits for CPA firms. We’ll cover how to conduct an audit, how often you should perform a cybersecurity audit and other recommendations for cybersecurity audits. Cybersecurity audits are one of the best cost-effective ways to protect your firm. They may be the difference between you finding and correcting a security flaw and a hacker finding and exposing the same security flaw causing irreparable financial damage. 

How to Perform a Cybersecurity Audit 

Depending on the level of detail used, cybersecurity audits can range in time frame from a few days to months. Ultimately, audits are intended to assess risk and identify measures to build stronger future protections. Audits can also ensure your firm is on track to comply with accounting industry regulations like SSAE 16, government recommended cybersecurity frameworks, and the Gramm-Leach-Bliley Act, that requires financial institutions like CPA firms to safeguard financial data. For many CPA firms, it’s best to hire a cybersecurity auditing company to occasionally take on this task. An outside, objective perspective can help illuminate vulnerabilities that were previously overlooked. However, internal audits can be done more frequently and still have real value. The following steps are broad guidelines for conducting a cybersecurity audit. 

  • Take stock of what’s most valuable: Prior to beginning an audit, consider what your firm’s most valuable electronic assets are. For many CPA firms, this is client data and internal client files. It could also include email chains and attachments or proprietary company information. Think about what information, if put into the wrong hands, would jeopardize your firm the most. You’ll also want to take stock of all your physical security including data centers, equipment rooms, and other infrastructure. This list is what’s most critical to protect and where you should focus the audit efforts. 
  • Identify common attacks: Once you clarify your top assets, consider how hackers may threaten them. In past articles we’ve covered topics like the top cyberthreats to CPA firms and how CPA firms can mitigate cybersecurity risk that detail how hackers usually target CPA firms. While your employees are critical for your success, research shows that up to 90% of cyberattacks that succeed are due to human error. List all the types of attacks that you consider a cybersecurity threat to your firm. These could include phishing scams, social engineering, malware, ransomware, denial of service, and hacking attacks. Be as specific as possible when documenting these attacks and take note of the potential areas of your firm they would target with each attack. 
  • Evaluate current security practices: After you’ve documented assets and highlighted potential types of attacks, it’s time to take a hard look at how you’re protecting your data. This stage requires honesty and transparency, and is therefore often done better by an objective, third party outside your firm. It’s important that you deeply understand your security as well as the cutting-edge technology and methods malicious hackers are using. At this point in the audit, you may test your security systems with a mock phishing email or social engineering scam to determine how many employees fall into the trap. Additionally, note how other cybersecurity measures like artificial intelligence, anti-spam and anti-virus, and intrusion detection systems compare to the industry best. 
  • Take protective action: Following step 3, be prepared for findings that aren’t comforting. You may find that employees are quick to open harmful links or share personal information. Your cybersecurity protections that you thought were state of the art might actually be outdated and vulnerable. Actions taken here are the most critical in any cybersecurity audit. Other steps in the audit expose potential problems, and this step allows you to find solutions that will better protect your firm. Some potential actions might include employee training, improved data protection and security, backing up critical data, updating software, and hiring additional security experts. 

These steps are cyclical. After each audit, the process begins anew. The results will inform future steps and highlight areas for focus. Be sure to carefully document the audit process and results to streamline future audits. Security audits are not a one-off endeavor but should be conducted frequently for best results. 

How Often to Conduct a Cybersecurity Audit

Audits can be time-consuming, expensive, and ironically, can take your security team’s focus away from their primary duties. You’ll also need to determine how often, and if, your company will hire outside experts to audit your security and how often you’ll conduct internal audits. For small- and medium-sized CPA firms, internal audits may realistically be the best option to ensure appropriate frequency. The one thing that no firm wants to do is to conduct an audit in response to a security breach. Regardless of your firm’s size, it’s recommended that you conduct security audits twice per year. 

Twice per year may seem like a lot, but for many firms an audit will be fast and painless, particularly after the first one has been completed. Audits will be fastest for those who primarily use cloud computing, a limited number of computer systems, and who conduct more frequent monitoring. Frequent auditing, even if every audit isn’t totally comprehensive, is an effective way to improve cybersecurity. 

Other Recommendations for Cybersecurity Audits

Successful cybersecurity audits adhere to some common principles. Following best practices for security audits can help elevate your firm’s cybersecurity. 

  1. Use outside experts: Even if your firm only hires outside experts annually or bi-annually, an outside perspective is critical for finding potential weaknesses. Unless your firm already employs an outside IT company, qualified cybersecurity auditors will help find vulnerabilities your internal team may overlook. 
  2. Document findings and establish protocols: Start by clearly documenting steps 1-4 above so future audits are faster and more streamlined. Share the results with all firm employees and remind them that security is the responsibility of everyone. Use the findings to update your data security policy and protocols and other relevant cybersecurity policies. When you get more comfortable with cybersecurity audits and make them a standard part of your year, then you’re more likely to have a strong cybersecurity system. 
  3. Try to break it: Remember that the point of a cybersecurity audit isn’t necessarily to show how strong your system is. Don’t approach it with intent of proving that your security works. Instead, try to break your system — find the flaws, expose weaknesses, test employees, and don’t hold back. Hackers surely won’t. Take all the measures to test your security that hackers would, within reason.  

Conclusion 

Cybersecurity audits are a strong action you can take to protect your CPA firm. They have the benefit of being preemptive and proactive and can help you find weaknesses before they become a problem. Audits are a cost-effective way to protect your CPA firm — they demonstrate to your clients that you’re protecting their data and prioritizing cybersecurity. Contact us today with any questions about cybersecurity audits for CPA firms or to learn more about our security services.

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