Can you really claim that your accounting system is safe in the current, fast-changing digital world?
The accounting field has not had it easier when it comes to cybersecurity. According to recent studies, almost two-thirds (more than 60%) of companies worldwide suffered a financial data breach, and small and medium-sized enterprises (SMEs) were disproportionately affected.
Traditional protections are not enough, as the increase in remote work, cloud usage, and AI-driven tools has significantly expanded the attack surface for cybercriminals.
The emergence of AI has reinvented accounting processes, including making fraud detection easier, automating reconciliations, and enhancing financial analysis. Nonetheless, there are new risks associated with this convenience.
Due to the growing use of AI, cybercriminals have been using it to carry out more advanced attacks, including deepfake invoice fraud, phishing, and automated ransomware targeting accounting software.
Moreover, sensitive financial information has become more exposed and at greater risk due to the exponential increase in the number of cloud-based accounting platforms. It was reported that almost three-quarters of accounting companies consider cybersecurity threats their top organizational priority, making it necessary to implement robust security measures.
This article will discuss the current state of accounting cybersecurity, recent threats, new technologies, and the latest best practices for protecting your financial data. This is an extensive revision to previous material on cyber risk management in accounting aimed at ensuring businesses remain ahead in a world where digital finance is both mighty and dangerous.
How Cyber-Crime Has Changed:
Cybercrime should be easy to avoid, provided you are sufficiently technologically literate. All the usual methods of phishing emails, social engineering, and malware have been talked about to no end, so there is no shortage of awareness.
Yet, cybercrime not only remains but is immensely prevalent across the business landscape. Just this year, for example, X (formerly known as Twitter) reported a breach that exposed data for over 220 million users.
Similar data breaches continue to happen, and according to IBM’s report this year, 2023 was the most expensive year in recorded history for data breaches, with the average cost of a data breach coming out to $4.45 million, which is an astronomical figure that demonstrates how serious this issue has become on a global scale.
If the core of the issue lies in human error, as suggested by Security magazine, then surely, through persistent, widespread cyber awareness campaigning, there should, by all rights, be a tangible, visible effect on these ever-growing rates.
On top of that, as the IBM report suggests, AI detection is estimated to save businesses an average of $1.76 million compared to companies without it, which should make a huge difference. Yet still, the numbers simply don’t add up.
Numerous factors are playing into this seemingly worsening accounting cybersecurity situation, but, as we alluded to previously, the most relevant and addressable one, in our estimation, is AI itself.
Yes, you heard correctly, we believe AI and technology to be a major cause of concern in accounting cybersecurity. Thanks to how widespread and accessible AI and automation are now, the logical answer from malicious parties to the rise of technological safeguards is to leverage technology themselves to keep up.
Thus, we end up in an arms race of sorts, with either side developing and leveraging technology to thwart the other. Let’s reevaluate the most common accounting cybersecurity threats in light of AI’s impact.
Phishing Scams and Social Engineering
Phishing has profited heavily from the proliferation of AI, particularly AI chatbots and image generators. Phishing scams were once very easy to catch if you kept your eyes peeled, but that’s no longer the case. Scammers from all around the world can now generate nigh-perfect email content, with immaculate grammar, in nearly any language they wish.
The usual tell-tale signs of phishing scams, like poor spelling and syntax, are now completely gone thanks to ChatGPT. Not to mention, with masking technology, cybercriminals can now even mask email addresses, making it harder to verify the legitimacy of the scam. Such attacks are usually referred to as Business Email Compromise (BEC) attacks.
Things get even more dire when we factor in social engineering. Imagine a scammer feeds writings and transcripts from your company’s CEO into an AI learning model. Now, this model can replicate those speech patterns and very easily dupe you.
Not to mention the rise of “DeepFakes,” in which cybercriminals use image and voice generation to create entirely fake videos and audio of individuals, such as CEOs. These can be leveraged for blackmail and can even trick a naïve accountant into paying hackers thousands of dollars, as was the case with a Hungarian firm a few years ago, when this technology was nowhere near as powerful as it is today.
There are still ways, of course, to avoid these scams. The obvious one is to contact the sender of the phishing email directly and ask about its legitimacy. But what do you do if a phishing scam poses as the business’s bank or a vendor, asking you to click a legitimate-looking link to reset your password or some other common excuse? You could call, but you might typically be met with a waiting queue or asked to schedule an appointment.
One solution to this issue is to have a second, disposable device on hand and enter the link there to see where it leads. Should the link be malicious, the worst you have lost is a cheap phone, making it a worthwhile risk.
But, of course, such solutions are hardly efficient and should not be used at a corporate level as part of a comprehensive security strategy. Instead, companies must invest in advanced security training for employees, along with up-to-date software that can help detect and prevent phishing attempts.
Additionally, creating a culture of cybersecurity awareness within the organization can greatly enhance overall security. Regular training sessions, workshops, and phishing simulations can equip employees with the knowledge they need to identify potential threats effectively. Furthermore, organizations should encourage employees to report suspicious emails without fear of repercussions.
By fostering an environment where everyone is vigilant and proactive about accounting cybersecurity, businesses can significantly reduce the likelihood of falling victim to these increasingly sophisticated scams. Ultimately, a collaborative approach to cybersecurity can help safeguard valuable assets against the ever-evolving landscape of cyber threats.
AI-Assisted Hacking and Password Cracking
Forgetting cunning methods of accounting cybercrime for a moment, let’s now talk about how much easier it has become to simply brute force your way into a business’s systems. With sophisticated algorithms and automation, hackers are able to perform feats that would be the stuff of classic spy movies.
A guy sitting in a van with a laptop can run millions and billions of scripts in a matter of hours and crack the encryption on your financial data. Thanks to machine learning and sophisticated algorithms, these malicious actors can sit back and wait for their automated hacking machine to eventually break in and commit Account Takeover Fraud (ATO).
And there is no real way for you to stop it. The only thing you can do is make sure you have as many layers of security as possible and invest heavily in developing customized financial data security measures to thwart these attempts. But what can a small business do in this case?
Small businesses, for the most part, do not have the resources to spare to combat brute force hacking. The best they can do is leverage measures like multi-factor authentication, keep data secured in trusted cloud storage, and hope for the best.
Small business owners must understand that cybersecurity isn’t just a large company issue; they are targets, too. Investing in employee training about identifying phishing scams, ensuring software is up to date, and conducting regular audits of data access can also help minimize risks. Proactive steps like these can often make a significant difference in deterring attacks.
There is no widely available solution to this problem yet. Luckily, however, there is also a severe lack of these types of attacks happening, relative to others. Brute-force hacking is still an immensely difficult process, and most cybercriminals would rather play the numbers game by sending phishing emails, hoping to catch someone on an off day.
Such lower-level attacks are preventable if businesses encourage a culture of accounting cybersecurity awareness.
Ten Tips To Improve Cybersecurity In Accounting:
1.Enhance Intense Access Controls:
Role-based access control helps limit access to accounting systems to authorized personnel only, so that sensitive financial information cannot be accessed by unauthorized individuals. Multi-factor authentication and permissions are reviewed regularly, reducing the risk of both internal and external breaches.
2.Periodically upgrade Software and Systems:
Maintaining accounting software and systems is a good practice that ensures vulnerabilities are fixed and defenses are robust. Regular system updates or a monthly patching schedule can make attackers rely less on outdated systems and more on security hygiene overall.
3.Safe Cloud Accounting Solutions:
Financial information is not vulnerable to breaches when cloud accounting tools are used with end-to-end encryption and a certified security approach. Checking provider compliance and encrypting data in transit and at rest can help ensure that even remote working conditions are safe.
4.Carry out Employee Cybersecurity Training:
The employees are considered the first line of defense. Educating employees about phishing, ransomware attacks, and other forms of social engineering can make your organization more resilient and minimise expensive errors or attacks.
5.Monitor Transactions with Unusual Activity:
It is important to periodically screen accounting transactions to identify fraud, malfunctions, or cyberattacks in their initial stages. Some automated tools and alerts enable teams to respond quickly to suspicious activity, helping avoid losing money.
6.Periodically Back-up Financial Data:
Keeping safe backups helps you safeguard your information from ransomware, accidental data loss, or system crashes. By providing several copies, both at the backup site and onsite, continuity and rapid recovery during emergencies are assured.
7.Encrypt Sensitive Accounting Data:
Payroll, invoices, and client record encryption ensure that information remains secure, even if it ends up in the wrong hands. Powerful encryption protects your organization’s financial data and builds client confidence.
8.Develop a Cybersecurity Incident Response Plan:
A well-defined response plan is crucial to ensure that, in the event of a breach, a response team can respond swiftly to limit damage, retrieve the data, and inform stakeholders. Consistent practices make the plan operative and effective.
9.Guardacy of Personal Devices in Accounting:
Limiting access to company-approved devices through accounting will minimize the chances of malware or data leakages. Sensitive financial records are secured through device management policies, secure remote access, and the ability to wipe lost devices.
10.Periodically Test and Audit Cybersecurity:
Regular audits, vulnerability tests, and penetration testing identify vulnerabilities before attackers. The examination of cybersecurity protocols and testing procedures will help keep systems safe and in compliance with regulations.
The maintenance of accounting systems to resist cyber threats is of utmost importance to business continuity and financial integrity. These ten tips will create robust protection against breaches, promote data accuracy, and enable the teams to work with high confidence in a digital-first setting. The practices will make businesses confident in their financial information, minimize risks, and build trust with clients, investors, and stakeholders.
What is the Answer to this New Age of Accounting Cybersecurity?
The point of this demonstration was to demonstrate how troubling an era we live in is for accounting cybersecurity. Seemingly, nothing is entirely trustworthy, and with most of our money being mere numbers in the cloud, we stand to lose it all in the blink of an eye. This is why we felt this conversation needed to be raised, and it adds significantly to the ongoing discussion about accounting cybersecurity.
While there is no clear answer, we can yet take solace in the fact that these same technologies can be used to fight fire with fire. When used strategically, AI can help predict potential threats, automate detection processes, and respond faster to incidents than human intervention alone.
This was an inevitability waiting to happen, and now that we are a year into the AI-centric future, it’s up to us to spread the word around and educate people on accounting cybersecurity and these new developments. And why stop there?
Newer and more malicious ways of attacking your financial data are constantly popping up, so it’s up to the accounting and finance community, as well as the entire business landscape, to start taking steps toward a safer future.
Implementing stronger security protocols, staying up to date on the latest technological advances, and fostering a culture of continuous learning in cybersecurity should be a priority. And if not directly, we urge you to spread this and many other such publications to get the word out.
A new age of accounting cybersecurity is here, and it will not wait for us to catch up.
