Cybersecurity in accounting: key risks and how to prevent them

Accounting firms have become prime targets for cyberattacks, and it’s not hard to see why. Every firm handles sensitive financial data that cybercriminals are eager to exploit. If that data is compromised, the impact extends beyond your clients. Your reputation, operations, and long-term success are all at stake.

Protecting your practice means being proactive. That starts with understanding the risks and knowing where vulnerabilities in accounting cybersecurity often emerge.

In this article, we’ll break down the biggest threats facing accounting professionals today, the protective steps that actually work, and the trends shaping the future of cyber security.

Why cybersecurity matters for accounting firms

With cyberattacks on the rise, cybersecurity in accounting has become a strategic priority, not just a compliance checkbox. And today, the stakes are higher than ever. For the first time since 2018, the financial services sector has overtaken healthcare as the most compromised industry — with over 700 reported breaches affecting more than 48 million individuals.

The costs aren’t just financial (though they’re steep — nearly $5 million globally per breach, and almost $10 million in the U.S.). They include lost business, operational downtime, reputational damage, and legal exposure.

To sum it up: accounting cybersecurity protects more than data. It protects your clients, your firm’s credibility, and your ability to operate without disruption.

The biggest cybersecurity threats facing accounting firms

Not all cyber threats hit the accounting industry the same way. Some are more common — and more damaging — because of the accounting data firms work with daily. Knowing what these threats look like can help you spot them early and avoid the fallout that follows.

Phishing: the most common way in

Phishing attacks are fake messages designed to trick someone into handing over sensitive information like passwords, client data, or banking details. They often look like they’re from a trusted contact — a coworker, a client, or even a bank.

Email is still the most popular way attacks get in. In fact, 90% of data breaches start with a phishing attempt. The financial sector is especially at risk, making up 23.5% of all phishing attacks.

Anyone can be a target: clients, partners, junior staff, or firm owners themselves. And for firms managing hundreds of clients, phishing is one of the most dangerous forms of cyber security failure because it relies on human error rather than system vulnerabilities.

Ransomware: pay up or lose everything

Ransomware is a type of malware that locks you out of your own systems. Cybercriminals encrypt your files and demand a ransom to restore access. And for accounting firms, losing access to financial data mid-tax season or during payroll can be catastrophic.

Today, ransomware is the second most common method cybercriminals use to breach organizations — right after phishing. These attacks often arrive through phishing emails, making them a one-two punch of risk.

And growing firms are especially vulnerable. According to the Rapid7 Ransomware Radar Report, companies with around $5 million in annual revenue fall victim to ransomware twice as often as those making $30–50 million — and five times more often than firms earning $100 million. These businesses are large enough to hold valuable data but often have gaps in accounting cybersecurity.

Insider threats: when the risk is already inside the firm

Insider threats happen when someone within the firm — whether by accident or intentionally — compromises your systems or data. There are three main types of insider threat actors:

• Regular employees: Staff who might unintentionally click a malicious link, share sensitive financial data, or use weak passwords.
• Third parties: Vendors or contractors with limited oversight who may not follow your internal security standards.
• Privileged users: Team members with high-level access who, if compromised, can cause major damage.

The majority of insider incidents — 55% — are due to employee or contractor negligence. Another 25% stem from malicious intent, and 20% involve credential theft.

The takeaway: Phishing, ransomware, and insider threats are the most common accounting cybersecurity threats. But once you know what they look like, you can take clear steps to reduce your risk and protect your financial data from every angle.

7 must-have cybersecurity strategies for accounting firms

No matter your firm’s size or structure, protecting financial data is non-negotiable. These seven cybersecurity strategies are essential for minimizing risk, maintaining compliance, and keeping your operations running without interruption.

1. Choose secure accounting software

The software you use shapes your security posture. When your tools are disconnected, outdated, or built without cyber security in mind, they leave gaps — and cybercriminals are always watching for weak spots. That’s why choosing software that puts security first is a must.

TaxDome is built with security and compliance at its core, not tacked on as an afterthought. All data is encrypted using bank-level 256-bit encryption and SSL. Two-factor authentication is available for every user, and optional biometric login adds even more protection on mobile.

Because everything happens inside a single secure platform — file sharing, messaging, e-signatures, billing — your firm avoids the risk of client data being exposed. Every action is tracked, from logins to document approvals, giving you complete oversight.

And for firms facing increased regulatory pressure, TaxDome meets a wide range of compliance standards including SOC 2, PCI DSS, GLBA, and more. It’s passed security reviews by both Google and Intuit, validating its readiness for firms operating at scale.

2. Train your team to spot threats

Even the most secure system can be compromised by a single careless click. That’s why human error is one of the leading causes of data breaches. Regular training ensures your team knows how to identify phishing attempts, avoid risky behavior, and follow security protocols like using strong passwords and enabling two-factor authentication.

3. Conduct regular security audits

Security isn’t a one-and-done effort. Regular internal audits help you catch vulnerabilities before attackers do. Review everything from access permissions and outdated software to backup protocols and file-sharing habits. Make this a recurring part of your operational checklist.

4. Establish security requirements

Start with a clear policy that outlines what secure behavior looks like at your firm. Define how accounting data should be accessed, shared, and stored. Include minimum requirements for password hygiene, device protection, file encryption, and software use — and hold everyone accountable to it.

5. Stay updated on threats

Cybercriminals evolve fast. Staying current on the latest scams, malware, and social engineering tactics gives you a critical edge. Resources like the IRS Dirty Dozen list and CISA advisories are a good starting point. Make threat awareness a regular habit — not something you only think about after an incident.

6. Consider cyber insurance

Cyber insurance can help your firm recover faster if an incident does occur. Many policies also include risk assessments, which can uncover weak spots in your setup. Depending on your client base, cyber insurance may also help you meet certain compliance requirements.

7. Encrypt sensitive data

Whether it’s stored or shared, financial data should always be encrypted. This ensures that even if someone gains unauthorized access, the information remains unreadable. Choose tools that support encryption by default, and avoid using unsecured channels like email for client documents.

Real-world cybersecurity breaches in accounting

The impact of a cyberattack can be huge, sometimes with lasting repercussions. Here are three real-world examples that show how cybersecurity failures unfold in the accounting space.

A Big Four breach

In 2017, global accounting giant Deloitte suffered a cyberattack that exposed sensitive client data, including emails, usernames, passwords, and IP addresses. The breach was traced back to a single administrator account that lacked two-factor authentication. It led to a full-scale internal investigation, regulatory involvement, and reputational damage that raised serious concerns about the firm’s cybersecurity maturity.

A near miss with $50K on the line

CFO Selections, a financial services firm based in Washington, shared the story of a client (referred to as “Acme”) that narrowly avoided a $50,000 fraud. A scammer had infiltrated the company’s accounts payable system and altered banking information for a vendor. Weak passwords, no multi-factor authentication, and loose access controls created the perfect opportunity for fraud — one that was only caught thanks to a vigilant employee.

When a client breach hits the firm

In a case reported by Accounting Today, a CPA firm was compromised after a hacker accessed a client’s email account. By mimicking the client’s communication style, the attacker tricked the firm into redirecting funds to a fraudulent bank account. By the time the fraud was discovered, a significant amount had already been lost.

Cybersecurity compliance and regulations

Cybersecurity compliance means following the laws and standards that govern how sensitive data is protected. For accounting firms, these rules vary depending on your location, industry, and the types of client data you handle.

While it might sound technical, staying compliant also builds trust and strengthens your accounting cybersecurity posture.

Key compliance frameworks for accountants:

• GLBA: Requires U.S. firms to implement safeguards for client financial information — including training, risk assessments, and written security plans.
• GDPR: Sets strict rules for how personal data is collected, stored, and used for any clients based in the EU — even if your firm isn’t located there.
• HIPAA: Protects health-related information. Relevant for accountants handling billing, payroll, or advisory services for healthcare clients.
• PCI DSS: Focuses on securing payment processing systems. If your firm collects credit or debit card details, this one’s non-negotiable.
• SOC 2: A voluntary framework that evaluates your internal security practices — often requested by larger clients or enterprise partners.

Top 5 trends shaping the future of accounting cybersecurity

Staying secure today is important, but staying ahead of what’s coming next is how firms build lasting resilience. These five trends are set to shape how accounting professionals protect their financial data in the years to come.

1. AI-powered threat detection

Artificial intelligence is rapidly transforming cybersecurity by helping firms detect threats earlier and respond faster. With machine learning analyzing patterns of behavior, AI tools can flag unusual activity before a breach happens — something that’s especially helpful for firms managing large volumes of client interactions or financial records.

2. Passwordless authentication

As phishing and credential theft become more sophisticated, many firms are moving away from traditional logins altogether. Passwordless authentication — using biometrics, security tokens, or mobile verification — offers a safer, faster alternative that’s harder for attackers to exploit.

3. Cybersecurity insurance

The global market for cyber insurance is projected to hit $22 billion by 2025 . With cybercrime predicted to cost the world $9.5 trillion this year alone, more firms are treating insurance as essential, not optional.

4. Blockchain for data integrity

Blockchain’s tamper-resistant digital ledgers could reduce bookkeeping errors and simplify audit trails. With potential applications in smart contracts, compliance, and secure recordkeeping, blockchain technology — forecasted to generate $94 billion in revenue by 2027 — is being watched closely by accounting professionals.

5. Behavioral biometrics

As deepfakes and identity spoofing become more convincing, behavioral biometrics offers a promising line of defense. By analyzing how users interact with systems (typing speed, mouse movement, etc.), it distinguishes legitimate users from imposters — even when credentials are compromised. 

Cybersecurity software features to look for

The best accounting cybersecurity tools go beyond protection and make security easy to manage. When evaluating platforms, focus on these core capabilities:

Secure login options

Look for two-factor authentication (2FA), biometric login (like Face ID or fingerprint), and optional Google SSO to ensure only the right people can access sensitive financial data.

Granular access controls

Your software should let you control who sees what, whether that’s system-wide settings for staff or document-level permissions for specific users or teams.

Centralized client interactions

Avoid the risk of third-party tools by managing communication, document exchange, payments, and e-signatures all within one secure platform.

Audit trails and activity tracking

Every login, upload, message, and change should be logged and time-stamped, giving you full visibility for both internal oversight and external compliance.

Integration with accounting tools

Direct integration with your core accounting software reduces the need for manual data transfers, helping you minimize exposure points and avoid security gaps.

Cybersecurity checklist for accounting firms

Use this checklist to evaluate whether your firm is covering the essentials when it comes to protecting financial data, client communications, and internal systems.

Want a copy for your team?

Download our free eBook, Client Trust in the Age of Cyber Attacks. Inside, you’ll find this checklist and more practical tips to help your firm build a secure, client-ready infrastructure.

Final thoughts

Cyberattacks may be on the rise, but so are the tools available to protect your firm. Staying secure today means more than installing antivirus software — it’s about proactively building a culture of cybersecurity. That includes training your team, keeping up with evolving threats, and choosing software that’s built with data protection at its core.

Ready to make security a competitive advantage? Book a free demo to see how TaxDome combines powerful accounting workflows with built-in safeguards that help protect your firm’s most sensitive data without slowing you down.