Skip to content
AICPA-CIMA
  • AICPA & CIMA:
  • Home
  • Engage 365 Communities
  • CPE & Learning
  • My Account
Journal of Accountancy
  • TECH & AI
    • All articles
    • Artificial Intelligence (AI)
    • Microsoft Excel
    • Information Security & Privacy

    Latest Stories

    • AI and the audit: AICPA publishes practice aid to assist auditors
    • Recasting retirement: 3 ways AI is changing client-adviser conversations
    • New checklist helps CPAs manage AI cyber risks

  • TAX
    • All articles
    • Corporations
    • Employee benefits
    • Individuals
    • IRS procedure

    Latest Stories

    • IRS urged by national taxpayer advocate to pause Kwong claims denials
    • IRS proposes regulations implementing premium tax credit changes
    • IRS grants Hurricane Isaias tax relief in Alabama, Florida
  • PRACTICE MANAGEMENT
    • All articles
    • Diversity, equity & inclusion
    • Human capital
    • Firm operations
    • Practice growth & client service

    Latest Stories

    • IRS urged by national taxpayer advocate to pause Kwong claims denials
    • IRS proposes regulations implementing premium tax credit changes
    • IRS grants Hurricane Isaias tax relief in Alabama, Florida
  • FINANCIAL REPORTING
    • All articles
    • FASB reporting
    • IFRS
    • Private company reporting
    • SEC compliance and reporting

    Latest Stories

    • SEC proposal aims to clarify securities rules for crypto assets
    • SEC eyes e-delivery as the default over paper
    • SEC shares 3 goals in proposed 2026–2030 strategic plan
  • AUDIT
    • All articles
    • Attestation
    • Audit
    • Compilation and review
    • Peer review
    • Quality Management

    Latest Stories

    • AI and the audit: AICPA publishes practice aid to assist auditors
    • PCAOB shares agendas for rulemaking, research
    • Liquidation accounting: When a going concern dissolves
  • MANAGEMENT ACCOUNTING
    • All articles
    • Business planning
    • Human resources
    • Risk management
    • Strategy

    Latest Stories

    • Risk response often doesn’t match the threat or the opportunity
    • Confidence in U.S. economy rises despite inflation concerns
    • Data governance: How finance builds trust in the numbers
  • Home
  • News
  • Magazine
  • Podcast
  • Topics
Advertisement
  1. newsletter
  2. Cpa Insider
CPA INSIDER

Top cyberthreats targeting accounting firms

Accounting firms face threats from cyberthieves using malware, phishing expeditions, and data theft to steal treasure-troves of client and financial information.

By Malia Politzer
March 16, 2020

Please note: This item is from our archives and was published in 2020. It is provided for historical reference. The content may be out of date and links may no longer function.

Related

February 3, 2020

3 ways to defeat ransomware: Plan, prevent, not pay

January 1, 2020

2020s vision: Tech transformation on tap

TOPICS

  • Technology
    • Information Security & Privacy
  • Firm Practice Management
    • Firm Operations

No industry is immune to the harmful effects of cybercrimes, and the financial damage can be devastating.

Cybersecurity breaches are estimated to cost businesses around the world a staggering $1.5 trillion annually, according to a report from the U.K.’s Bromium cybersecurity firm. Additionally, nearly three-quarters of the more than 500 business leaders companies surveyed for Grant Thornton’s 2019 Cyber Security: The Board Report relayed revenue losses of up to 25% following cybersecurity attacks.

Accounting firms — which have access to sensitive financial and other personal client data — are a top target for cybercriminals, according to Vijay Rathour, partner in the Digital Forensic Group at the London office of Grant Thornton. Many small and medium-sized companies and firms might believe themselves to be at a lower risk than the bigger, higher-revenue firms, but this simply isn’t the case, Rathour said.

“It may seem counterintuitive, but the risk of cyberattacks is disproportionally higher for smaller and medium-sized organizations, which tend to be much more reactive than proactive,” said Rathour. “They need to realize that this can happen, and they are a target.”

In fact, small and medium-sized accounting firms are often deliberate and primary targets for data theft. This is because they often host sensitive client data and can act as gateways to larger or more prominent parties. They also often lack the sophisticated defense infrastructure of larger firms. That’s why it’s more important than ever for accounting firms to understand which risks they might be vulnerable to, and to take steps to protect themselves. 

In a recent interview, Rathour outlined three of the top external cyberthreats accounting firms face and provided pointers on how to reduce a firm’s risk of becoming a victim.

Malware and ransomware. Ransomware is a type of malware designed to take computers, networks, files, and sensitive data hostage by encrypting files and blocking owners’ access. Once data is encrypted, the attacker will typically demand payment (often preferring to be paid via anonymous cryptocurrency such as bitcoin) to restore access to files. According to a 2019 Ponemon and Accenture report on cybersecurity, the number of organizations experiencing ransomware attacks had increased by 15% over one year, and attacks had more than tripled in frequency over the previous two years. It’s critical to invest in aggressive prevention strategies, according to Rathour. “Malware can infect your system on Monday, map out every other computer it can reach through the network, and will encrypt every file it can access — every Excel document, health records, everything,” said Rathour. “By the time you come into office on Wednesday, your entire business has been immobilized. And that’s when you get a message demanding the ransom.” Whether a company should entertain paying the ransom will vary based on the situation.

Advertisement

Phishing schemes. Most ransomware is delivered via phishing schemes, which are often deployed via emails that contain malware hidden in seemingly innocent file attachments. More sophisticated phishing schemes include “spear phishing,” which uses personal information to target a specific individual, and “whaling,” which is used to target high-ranking corporate officials — such as a CFO (or the CFO’s secretary). For example, few accountants might think twice about opening an email with a subject line about an invoice for a conference they knew that people in their company would be attending the following week. “Cybercriminals socially engineer emails to make it more likely that someone will open them, and quite often, people do,” said Rathour.

Data theft. Cyberbreaches can have huge financial consequences, with the global average cost of a data breach coming in at $3.92 million between July 2018 to April 2019, (for larger organizations, the average cost was $5.11 million, whereas for smaller organizations with between 500 and 1,000 employees, the average cost was $2.65 million), according to an IBM and Ponemon report.

This total cost includes aspects such as the cost of investigation and forensics to determine the root cause of the data breach, organizing the incident response teams, determining the victims of the breach, legal and consulting services, lost business, to name only a few. For organizations, which can include accounting firms, the average time between when a data breach occurred and when the breach was contained is approximately 279 days, according to the IBM and Ponemon report.

How to protect the firms’ data

The most effective protection strategies begin with prevention, according to Rathour. Employee training regarding the risks of cyberthreats and basic protective measures, such as not opening every email that comes in, are considered the gold standard for cybersecurity hygiene. But training alone is unlikely to reduce a firm’s risk of falling victim to cybersecurity threats, according to Rathour.

“We aren’t saying, ‘Don’t train your people’ but that it’s important to take a multilayered approach,” he said.

There are a number of practices firms can and should put into place to protect themselves from cyberthreats.

For small to medium-sized firms that have limited resources, however, the following practices can make big differences in preventing damage from cyberattacks, according to Rathour.

Advertisement

Have a good backup regime. Most large organizations should have multiple backup strategies, up to and including real-time backups and full-capacity replication, according to Rathour. However, as this is costly, he said smaller organizations should retain different generations of backup — one for each of the last seven days, one for each week of the last month, one for each month of the year, and one for each calendar year. That way, if a problem strikes they can restore to a suitable backup.

The backup should also be physically removed from the network, to ensure that in case of a malware infection, the backup doesn’t also become infected. As an example of good backup hygiene, Rathour suggested that the head of the IT department deliver the backup every Friday to the office manager, who can then store the backup in an off-site safe. It’s also a good idea to periodically test backups for recoverability, he said.

“You want to make sure you have a complete off-site copy,” said Rathour. “It may be redundant for years, but the one day you need it, you’ll be grateful to have a backup that allows you to go back to business as usual as quickly as possible. Business interruption is the major risk.”

Create an environment of “security by design.” Most accountants are familiar with the practice of segregated duties, as a part of standard internal controls. Similarly, Rathour suggested that it’s equally good practice for firms to segregate access to data. Such data segregation is both virtual and physical.

“Make sure the majority of your people only have access to the data they actually need to do their jobs,” Rathour said. “That way, if one person’s computer is breached, all the company data won’t be compromised.”

According to Rathour’s recommendations, an organization should physically segment an environment, virtually segment the computers within it, and then practically segregate the datasets. For example, a personal assistant shouldn’t need access to an executive’s private files, but they should have access to an executive’s calendar. By adopting a “least privileges security” approach, each staff member has the minimum clearance required to do their job, and nothing more.

Delete old, irrelevant data files. Data breaches can be extraordinarily expensive, costing a company an average of approximately $150 per record, according to the IBM and Ponemon report. Given that the average size of a data breach is 25,575 records, according to the same report, that quickly adds up. To minimize loss in case of a breach, Rathour suggested engaging in strategic pruning, which is when firms review their data and delete records they are no longer legally or commercially obligated to keep.

Advertisement

“Many firms have a legal obligation to hold on to records for seven years, but why do we have it for eight years?” said Rathour. “You have to think, why am I holding on to data which, if lost, would create commercial harm?”

Data breaches, malware, and ransomware attacks are not just expensive — leading to potential losses in millions — but they can also mar the reputation of an accountancy firm for years.

By putting in place these simple prevention strategies — a good backup regime, security by design, and periodically deleting old files — firms can mitigate the risks of becoming targets.

— Malia Politzer is a freelance writer based in Spain. To comment on this article or to suggest an idea for another article, contact Drew Adamek, a JofA magazine senior editor, at Andrew.Adamek@aicpa-cima.com.

Advertisement

latest news

October 15, 2026

IRS urged by national taxpayer advocate to pause Kwong claims denials

October 15, 2026

IRS proposes regulations implementing premium tax credit changes

October 14, 2026

IRS grants Hurricane Isaias tax relief in Alabama, Florida

October 14, 2026

Social Security wage base and COLA announced for 2027

October 13, 2026

AICPA recommends IRS clarification of Form 8050

Advertisement

Most Read

IRS raises per diem rates for business travel effective Oct. 1
Social Security wage base and COLA announced for 2027
Government says Kwong court misread COVID tax relief law
AICPA reminds states of disaster-relief process with filing deadline near
IRS changes course to allow automatic Trump account enrollment
Advertisement

Podcast

October 15, 2026

A Raven’s-eye view on interest rates, jobs, and the U.S. economy

October 8, 2026

Accounting’s future: Embrace change and build on trust

October 1, 2026

Tweak the message, prep for pushback, succeed in the boardroom

Features

New checklist helps CPAs manage AI cyber risks
New checklist helps CPAs manage AI cyber risks

New checklist helps CPAs manage AI cyber risks

Using an Excel agent to clean, validate, and reconcile data
Using an Excel agent to clean, validate, and reconcile data

Using an Excel agent to clean, validate, and reconcile data

Going concern: What CPAs in audit and finance should know
Going concern: What CPAs in audit and finance should know

Going concern: What CPAs in audit and finance should know

Liquidation accounting: When a going concern dissolves
Liquidation accounting: When a going concern dissolves

Liquidation accounting: When a going concern dissolves

SPONSORED REPORT

Get your clients ready for tax season

Help clients avoid surprises with year-end planning strategies for managing taxable income, maximizing deductions, and adjusting to OBBBA changes affecting individuals and businesses.

From The Tax Adviser

September 30, 2026

Navigating the QSBS rules in pass-through structures

September 30, 2026

Sec. 338(h)(10) elections in business acquisitions

August 31, 2026

What today’s clients expect from their CPA and how firms are responding

August 31, 2026

2026 tax software survey

MAGAZINE

October 2026

October 2026

October 2026
September 2026

September 2026

September 2026
August 2026

August 2026

August 2026
July 2026

July 2026

July 2026
June 2026

June 2026

June 2026
May 2026

May 2026

May 2026
April 2026

April 2026

April 2026
March 2026

March 2026

March 2026
February 2026

February 2026

February 2026
January 2026

January 2026

January 2026
December 2025

December 2025

December 2025
November 2025

November 2025

November 2025
view all

View All

http://JofA_Default_Mag_cover_small_official_blue

PUSH NOTIFICATIONS

Learn about important news

This quick guide walks you through the process of enabling and troubleshooting push notifications from the JofA on your computer or phone.

CPA LETTER DAILY EMAIL

CPA Letter Logo

Subscribe to the daily CPA Letter

Stay on top of the biggest news affecting the profession every business day. Follow this link to your marketing preferences on aicpa-cima.com to subscribe. If you don't already have an aicpa-cima.com account, create one for free and then navigate to your marketing preferences.

Connect

  • X Logo JofA on X
  • facebook JofA on Facebook

HOME

  • News
  • Monthly issues
  • Podcast
  • A&A Focus
  • PFP Digest
  • Academic Update
  • Topics
  • RSS feed rss feed
  • Site map

ABOUT

  • Contact us
  • Advertise
  • Submit an article
  • Editorial calendar
  • Privacy policy
  • Terms & conditions

SUBSCRIBE

  • Academic Update
  • CPE Express

AICPA & CIMA SITES

  • AICPA-CIMA.com
  • Global Engagement Center
  • Financial Management (FM)
  • The Tax Adviser
  • AICPA Insights
  • Global Career Hub
AICPA & CIMA

© 2026 Association of International Certified Professional Accountants. All rights reserved.

Reliable. Resourceful. Respected.