June 12, 2025
Accounting firms have long treated compliance like a to-do list: install antivirus software, set up multi-factor authentication (MFA), back up your data, and call it a day. But that outdated mentality is a liability in 2025.
Today's CPA firms face a landscape where cybersecurity, FTC compliance, and cyber insurance aren't separate boxes to check, but a connected ecosystem. If you're only focused on meeting the minimum, or simply sticking to outdated accounting standards, you're already behind.
The Federal Trade Commission's (FTC) Safeguards Rule has shifted what remaining compliant actually means. It's no longer about what looks good on paper. It's about whether your systems, policies, and IT support can stand up to real scrutiny and threats.
This FTC compliance guide is specifically for CPA and accounting firms. This post walks through what the Safeguards Rule requires, how cybersecurity and cyber insurance play into it, and what steps you need to take for protection. Learn how managed IT services for accounting firms will help protect your firm in 2025 and beyond.
What Is the FTC Safeguards Rule?
The FTC Safeguards Rule is part of the Gramm-Leach-Bliley Act (GLBA). It requires financial institutions, including CPA and accounting firms, to implement a written information security program that protects customer data. Key requirements include:
Annual risk assessments
Encryption for sensitive data
Access control policies
Continuous monitoring and logging
Incident response plans
Ongoing employee security training
This isn't just for big firms. Small firms also need to follow these accounting standards and rules. If you're a CPA firm handling sensitive financial or personal information, this applies to you.
What Does the Safeguards Rule Require Companies to Do?
The Safeguards Rule requires companies to implement security measures, including administrative, technical, and physical safeguards, ensuring the protection of customer information. This includes conducting risk assessments, developing written security plans, and training employees on data privacy policies to mitigate potential threats and comply with regulations effectively.
FTC Safeguard rule Compliance Isn't a Simple Checklist - It's a Process
Too many firms ask, "Are we compliant?" and accept a vague yes. But in 2025, that's not enough.
You need:
Documentation that stands up to auditors
Systems that meet FTC safeguard rules
IT support that's proactive, not reactive
Cyber insurance that actually pays out
If your compliance strategy is still stuck in 2018, it's time to modernize.
The Danger of Treating Compliance Like a Checkbox
Compliance should be regarded as a dynamic process rather than a mere checkbox activity. When firms approach compliance requirements superficially, they expose themselves to significant risks, particularly concerning sensitive customer information. A comprehensive, written information security plan grounded in core data security principles is vital for protecting financial data against unauthorized access and ensuring adherence to generally accepted accounting principles and international financial reporting standards.
Embedding continuous monitoring into compliance efforts is crucial, as cyber threats evolve rapidly. Emphasizing security awareness training for employees enhances defenses, reinforcing accountability and understanding of the safeguards necessary to protect financial information from breaches.
How Do Cybersecurity, Cyber Insurance, and Compliance Work Together?
Cybersecurity, cyber insurance, and compliance are interconnected elements that strengthen an organization's defenses. Cybersecurity establishes protective measures, while compliance ensures regulatory adherence. Meanwhile, cyber insurance mitigates financial risks from breaches. Together, they create a comprehensive risk management strategy vital for safeguarding firms against evolving threats.
Cybersecurity
Modern IT support for accounting firms includes:
Endpoint detection and response (EDR)
Well established backups
Phishing simulations
Zero-trust architecture
These are not just best practices; they are baseline expectations for firms that want to protect sensitive client data and remain in business.
Cyber Insurance
Insurers are no longer satisfied with surface-level protection. To qualify for coverage, you often need to:
Complete a detailed checklist template
Show documentation of employee training
Maintain logs showing access and audit history
Prove implementation of FTC safeguards rule checklist controls
Cyber insurance is becoming a proxy for compliance, and it's shaping what auditors, regulators, and clients expect from your firm.
What does a Reasonable Information Security Program Look Like?
How do you determine a CPA firm's compliance requirements? Look to the FTC security program framework, standards, and best practices for guidance.
FTC Security Program Framework
Risk Assessments - Identify threats to customer data
Access Controls - Ensure only authorized personnel access sensitive information
Encryption - Protect data in transit and at rest
Monitoring and Logging - Track all access and changes
Incident Response - Have a plan for when—not if—something goes wrong
Employee Training - Make staff part of the solution, not the problem
Vendor Oversight - Make sure third-party apps and platforms are secure
This isn't theory, it's a practical roadmap that a quality and reliable managed IT services for accounting firms company, like Tech Rage, can implement. FTC Safeguards rule is enforceable, so make sure your network and technology stack are ready.
What Happens When Your Cyber Security Practices Miss the Mark?
When cyber security practices fail, companies face many risks that can lead to serious problems. Data breaches, money losses, and harm to a company's name are just some of the bad results of poor cyber security. Not following rules can also cause legal issues that can break client trust and disrupt work. All these can be huge dangers to a company's future in today's fast-changing digital world.
In our connected world, the effects of a cyber breach go beyond just losing money. Losing sensitive data affects not just those involved but also damages the company's trust with others and can result in a significant security breach. Also, laws about data protection are getting stricter. This makes it very important for businesses to follow these rules when working online.
Putting money into strong cyber security is now a must for companies that want to protect their work and name. Taking steps like regular security checks, training workers, using encryption tech, and having plans for incidents is key for good cyber security. By focusing on being ready and strong in terms of cyber safety, companies can reduce risks early on. They show they care about keeping sensitive data safe and achieving long-term success in the digital age.
What Are the Safeguards Rule Breach Notification Requirements?
The Safeguards Rule requires firms to notify affected individuals of a data breach without unreasonable delay. Notifications must include the nature of the breach, types of information involved, and steps taken to mitigate harm, ensuring transparency and compliance with legal obligations.
How do managed IT services for accounting firms help with FTC compliance?
Managed IT services for accounting firms enhance FTC compliance by ensuring robust data security, implementing necessary software updates, and providing ongoing monitoring in line with regulatory accounting practices. These services help identify vulnerabilities, streamline processes, and maintain documentation, ultimately reducing the risk of non-compliance and enhancing overall operational efficiency.
Managed IT Services and CPA Compliance Best Practices
This is where managed IT services come in. An experienced MSP like Tech Rage IT:
Implements and maintains your security stack
Conducts risk assessments
Provides round-the-clock monitoring and support
Documents policies and technical controls for insurers and auditors
It's not just IT support for accounting. It's the infrastructure that enables CPAs to remain compliant.
Which Businesses Need an FTC Compliance Guide?
The FTC Safeguards Rule CPA firms and accounting compliance goes beyond best practices. If your business manages any sensitive financial, health, or customer data—this matters, especially regarding confidentiality. Law firms, healthcare providers, even construction companies with digital project data need to treat IT security as a compliance requirement, not an optional upgrade.
For businesses without a clear IT and compliance strategy, cyber insurance denials and FTC penalties are just one breach away.
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