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Cybersecurity best practices as 2025 tax season kicks off

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Every year during tax season, finance professionals handle an influx of sensitive financial and personal information passed along by their clients. Although most CPAs and accountants excel at processing this information, as well as other data related to their field, they’re typically not experts in cybersecurity.

As our technology-driven world grows increasingly complex and evolves more rapidly over time, the more important it becomes for financial institutions to take precautions that safeguard their clients’ sensitive information (and also their own). Bad actors are always working to get a step ahead of protection tech and services, and take advantage of the habits of employees who may not be aware of the latest cyber threats.

The best CPAs and accountants tend to be naturally inquisitive, perhaps to the point of skepticism — and their clients should thank them for it. Because when it comes to finances or cybersecurity, speaking as someone with professional experience in both spaces, those characteristics are superpowers. As cyberattacks become increasingly frequent and sophisticated, financial professionals should be encouraged to maintain a healthy dose of suspicion and lean into hypervigilance. From small accounting operations to large, enterprise-level firms, organizations and their employees must understand and embrace the importance of cybersecurity and its best practices.

Tax season is busy and a potential cybersecurity weakness

It’s critical for financial organizations to observe and maintain cybersecurity best practices, even (and perhaps especially) during tax season. Increased workloads during the busy season may push cybersecurity and network infrastructure down the list of priorities, but bad actors often look for such openings to exploit.

CPAs handle an influx of sensitive financial information and personal information during tax season, which could make them a more attractive target for cybercriminals. Failing to strengthen and maintain cybersecurity technology and protocols could lead to even more chaos and stress during what can already be a nerve-wracking time of year for the industry.

Building client and firm cybersecurity protocols

There is no one-size-fits-all approach to cybersecurity and instituting best-practice protocols, but one of the best methods in the financial services space is to separate cybersecurity into a two-pronged issue: client information and firm information.

Because clients — like CPAs — are rarely cybersecurity experts themselves and, in fact, often operate under the expectation that a financial firm has the proper tools and protocols in place to protect their information, it’s vitally important that nothing be taken for granted on this side.

Key areas of focus for client information

  • Email: Email is inherently insecure for the exchange of sensitive financial documents. Once an email is sent, a firm has little to no control over where it ends up — possibly forwarded, intercepted or left in an insecure inbox. Email is also a primary attack vector for phishing. Clients might accidentally open malicious attachments or click on links in phishing emails disguised as legitimate requests. It can be clunky, too, as some email providers block certain file types that could be necessary for tax preparation, and size limits may prompt clients to use insecure methods, such as unencrypted file-sharing services or breaking files into multiple emails — a significant data security risk.
  • Secure portal: The best antidote to publicly available email is a secure portal. A private, secure portal provides a financial firm with a controlled, encrypted environment for file sharing, minimizing the risk of breaches. Encryption protects data in transit and at rest, and access controls allow a firm to decide who gets access to which files and set permissions (view, download or edit) for further guardrails. Additionally, portals often log activity and provide an audit trail of who has accessed and modified files.
  • Guest Wi-Fi networks: Guest networks are essential for accountants and CPAs in order to protect client data and their own systems. Strong passwords, encryption and network segmentation are crucial components of a secure Wi-Fi network. For extra layers of security, consider hiding your guest network’s SSID (network name), restricting guest network access to internet-only (blocking access printers and file shares) and creating a separate access point, further segregating it from your main network.

Internally, protecting firm information requires a multilayered approach that encompasses technology, policies and ongoing employee training. Strong access controls, encryption and data backups are fundamental security measures, but accounting firms should also partner with cybersecurity experts to create a comprehensive security program that accounts for employee awareness training and builds a strong security culture.

Key areas of focus for firm information

  • Device security: All company devices and storage media, including hard drives and USB drives, should be encrypted to prevent data loss and theft. Install robust endpoint security software (antivirus, anti-malware and intrusion detection) on all company devices that access firm networks and client data. Implement mobile device management solutions to secure company-issued mobile devices and enforce security policies.
  • Data security: Firms should use data loss prevention tools to prevent sensitive data from leaving the network without authorization. Secure file-sharing platforms and encrypted email for internal and external communication protect sensitive data. Meanwhile, a comprehensive data backup and recovery plan helps ensure business continuity in the case of adverse events such as a ransomware attack or even a natural disaster.
  • Employee training and awareness: In addition to new employee training, regular security awareness training for all employees should be conducted to educate a firm’s workforce about cybersecurity threats, company security policies and best practices (including recognizing phishing emails and following strong password habits). Run simulated phishing attacks to test employee awareness and reinforce their training, and develop and regularly practice an incident response plan so that, if all else fails, employees know how to react in case of a security incident. This can significantly mitigate lost time, revenue and reputational impact in the event of a cyber attack.
  • Physical security: Implement physical security measures to protect office space and equipment, including old-school and analog methods. That may include security cameras, visitor logs and physical locks that limit access to control systems. Be sure to shred and securely dispose of sensitive documents to prevent data breaches.

Cyber attacks, no matter the time of year, can have significant financial and reputational costs. Organizations that lack the time or resources to bolster or sustain their cybersecurity and network infrastructures — again, especially during the upcoming busy season — should consider partnering with external cybersecurity specialists to ensure their clients’ personal information and network security stay protected. As always, better safe — and secure — than sorry.

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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