2023 FTC Safeguards Ruling and its Impact on Accountants and CPAs

In 2023, the Federal Trade Commission (FTC) implemented a groundbreaking ruling known as the FTC Safeguards Rule. This rule is designed to enhance the security and privacy of sensitive consumer information held by businesses. An extension of the Gramm Leach Bliley Act, the rule was recently expanded to include non-banking financial institutions. While the ruling affects various industries, its impact on accountants and Certified Public Accountants (CPAs) is particularly significant.

Overview of the FTC Safeguards Rule:

The FTC Safeguards Rule establishes a framework for businesses to safeguard consumer data and protect it from unauthorized access, use, or disclosure. It requires covered entities to develop, implement and maintain comprehensive information security programs. The ruling applies to organizations that collect, store, process or transmit personal financial information about consumers. 

Key Security Features Impacting Accountants:

Risk Assessment and Management:

• Designate a qualified individual or entity to implement and be in charge of your security program
• Conduct thorough risk assessments to identify potential vulnerabilities in their data systems.
• Implement risk management strategies to mitigate identified risks effectively.
• Implement regular risk assessments and updates to security protocols.

Encryption and Data Protection:

• Implement robust encryption measures for both data in transit and data at rest.
• Utilize strong encryption algorithms and secure key management systems to prevent unauthorized access.

Access Controls:

• Mandate multi-factor authentication (MFA) to prevent unauthorized access.
• Establish role-based access controls to ensure that employees have access only to the data they need to perform their duties.

Incident Response and Data Breach Notification:

• Develop a well-defined incident response plan to address potential data breaches promptly.
• Establish procedures for investigating and remediating security incidents, including notifying affected individuals and appropriate authorities as required.
• Develop procedures to report data breaches to affected consumers in a timely manner.

Employee Training and Awareness:

• Provide comprehensive training programs to educate your staff about security threats, data handling procedures, and the importance of confidentiality.
• Employee training must be ongoing to help create a culture of data security within the organization.

How does Swizznet help you comply with the FTC Safeguard Policy?

Swizznet offers comprehensive IT solutions where security and peace of mind go hand in hand. We ensure that your valuable data is safeguarded while enjoying uninterrupted productivity. Our dedicated team of experts works tirelessly to provide Visory’s Secure Office Solution, a comprehensive suite of services covering all aspects of your IT infrastructure. Experience the confidence that comes with a truly holistic IT solution, where security and support are seamlessly integrated to propel your business forward.

The 2023 FTC Safeguards Rule brings significant changes to the way accountants and CPAs handle consumer data. Compliance with the ruling requires accountants to develop and maintain robust information security programs, implement encryption and access controls, and establish incident response plans, plus a robust employee training and awareness plan.

Visory’s Secure Office Solution can help position your business for growth by securing your critical customer data and also meet the requirements of the Safeguards Rule.