General Cybersecurity Regulations for Accounting & CPA Firms
Compliance Requirements for Protecting Client Data
Accounting and CPA firms handle sensitive financial data, making them subject to specific cybersecurity regulations and guidelines at federal and state levels. These rules protect client information, ensure compliance, and mitigate cyber threats like phishing and data breaches. Below is a summary of key requirements as of August 7, 2025, tailored for financial professionals, including accounting firms served by our concierge services.
1. FTC Safeguards Rule (Gramm-Leach-Bliley Act)
Classifies CPA firms as “financial institutions,” requiring a comprehensive information security program.
Key Requirements
- Designate a qualified cybersecurity overseer.
- Conduct regular risk assessments.
- Develop a Written Information Security Plan (WISP).
- Implement Multi-Factor Authentication (MFA).
- Encrypt client data in storage and transit.
- Provide employee cybersecurity training.
- Vet third-party providers for compliance.
- Maintain an incident response plan.
- Enforce secure data disposal policies.
Details
Applies to firms with ≤5,000 customers. Non-compliance risks fines and legal liabilities. Our IT and compliance services can ensure MFA and third-party oversight.
2. IRS Publication 4557: Safeguarding Taxpayer Data
Voluntary guidelines for tax professionals, critical for PTIN renewal.
Key Requirements (Security Six)
- Conduct risk assessments and develop a WISP.
- Use MFA and role-based access controls.
- Provide security awareness training.
- Encrypt taxpayer data.
- Maintain updated firewalls and system patches.
- Implement a Data Breach Response Plan.
Details
Non-compliance risks fines up to $50,000 per breach and PTIN loss. Our monitoring subscriptions support encryption and training compliance.
3. State-Specific Data Privacy Laws
States impose data privacy laws affecting CPA firms handling personal data.
Key Examples
- CCPA (California): Disclose data practices, allow client data access/deletion, report breaches within 72 hours.
- New York: Requires risk assessments, encryption, and breach notifications.
- NJ Data: Mandates security practices and breach notifications.
Details
Fines up to $7,500 per violation (CCPA). Our compliance advisory and IT services ensure state compliance.
4. AICPA SOC for Cybersecurity
Voluntary framework to assess and report cybersecurity programs.
Key Components
- Describe cybersecurity program.
- Evaluate control effectiveness.
- Provide stakeholder reports.
Details
Enhances client trust and aligns with FTC/IRS rules. Our advisory services support SOC implementation.
5. Proposed 2025 National Cybersecurity Framework
Potential framework mandating cybersecurity practices (speculative as of 2025).
Key Requirements
- Minimum controls for cyber insurance.
- Regular penetration testing and audits.
- Mandatory cybersecurity training.
Details
Not yet enacted. Our fixed-fee projects can prepare firms for emerging standards.
6. Cyber Insurance Requirements
Some states require cyber insurance with minimum security controls.
Key Requirements
- Implement MFA and encryption.
- Conduct risk assessments and audits.
Details
Our monitoring and advisory services ensure insurance eligibility.
Best Practices for Compliance
CPA firms should adopt these practices to meet cybersecurity regulations:
- Conduct regular risk assessments to identify vulnerabilities.
- Implement MFA and encryption for all systems.
- Train employees on phishing and secure data handling.
- Vet third-party providers for compliance.
- Maintain a WISP and incident response plan.
- Consider AICPA SOC for Cybersecurity for client trust.
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Contact our concierge services to ensure compliance with cybersecurity regulations for your CPA firm.
Get in TouchReferences
- ZCybersecurity: Cybersecurity Guide for CPA Firms 2025
- CPAI: The CPA’s Cybersecurity Imperative
- PracticeProtect: 4 Cybersecurity Policy Documents
- VC3: FTC Safeguards Rule for CPA Firms
- CPASiteSolutions: Cybersecurity for Accountants 2024
- CPROU: IRS Cybersecurity Obligations for CPAs
- DCSNY: Cybersecurity for CPAs 2024
- CPAJournal: Cybersecurity Tools for CPAs
- RedRockTG: Cybersecurity Regulations for CPA Firms
- RightWorks: Accounting Firm Data Security
- UMETech: IT Compliance for CPAs 2024
- PKTech: Impact of Cybersecurity on Accounting Firms
- UpGuard: Top 9 Cybersecurity Regulations
- TheTaxAdviser: Data Protection for CPAs
Disclaimer
The information provided on state and federal cybersecurity regulations is accurate as of August 7, 2025, based on available sources. However, regulations are subject to change, and specific requirements may vary by state, industry, or business structure. Readers are strongly encouraged to conduct their own research and consult with legal, compliance, or industry professionals to ensure adherence to current laws and regulations applicable to their specific circumstances.