Cybersecurity – The Biggest Challenge CPAs Must Prepare For in 2025

In 2025, cybersecurity will no longer be a secondary concern for CPAs—it will be an urgent and essential part of their broader business strategy. As digital threats grow more sophisticated, CPA firms are expected to allocate a record share of their budgets toward cybersecurity defenses.

Engineering and re-engineering cybersecurity measures will no longer be optional—it will be one of the biggest challenges CPAs must address to protect their practices and clients.

What’s at Stake?

The accounting profession has always been responsible for safeguarding sensitive financial data. However, today’s digital environment, combined with stricter regulations, means the stakes are higher than ever.

The AICPA Code of Professional Conduct requires CPAs to exercise due diligence in protecting client information. With rapid digital innovation, a CPA’s role now extends far beyond business advisory—it also includes securing massive volumes of sensitive data against ever-evolving cyber threats.

In January 2024, the AICPA updated the Statements on Standards for Tax Services (SSTSs). A notable addition was Section 1.3, which heightens expectations for safeguarding taxpayer data in the digital era. The amended standards require CPAs to:

• Follow all applicable data protection laws.
• Implement secure data storage methods.
• Adopt best practices and emerging cybersecurity innovations.
• Vet third-party vendors handling client information.

Section 1.3 establishes that CPAs must exercise a “reasonable” standard of care, aligned with contemporary data security methods. Simply installing antivirus software and setting passwords is no longer enough. CPAs are expected to continually assess, update, and improve their cybersecurity posture.

Importantly, CPAs also carry the burden of proof—if a breach occurs, they must demonstrate that adequate measures were taken to protect client data. Failure to do so can result in significant penalties, litigation, and reputational damage.

One key regulation reinforcing this responsibility is the Gramm-Leach-Bliley Act (GLBA), which applies to tax preparers and CPA firms. Under the Safeguards Rule, firms must maintain a Written Information Security Plan (WISP) detailing how they protect customer information. The IRS further outlines these expectations in Publication 4557: Safeguarding Taxpayer Data. Firms that fail to comply risk severe financial penalties and enforcement actions.

Moreover, CPAs working with clients internationally must navigate global regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), which impose additional obligations on data privacy and breach notification.

How is the Risk Amplified & Cascaded in 2025? 

The threat landscape continues to worsen. According to Statista, the United States experienced 3,205 data compromises in 2023, affecting over 353 million individuals—a record high. The accounting and finance sectors were notably among the top targets due to the sensitivity of the data they hold.

Key factors amplifying cybersecurity risks for CPAs include:

• Edge computing: Edge computing drives decision-making with real-time data from connected devices. However, edge devices are not fully autonomous—they interact with cloud platforms, increasing the potential for interception or tampering if not properly secured. Each device becomes a new point of vulnerability.
• Legacy Tech Issues: Many CPA firms still rely on outdated systems. Legacy infrastructure often creates information silos, making data harder to monitor, manage, and secure. Older systems are also prime targets for attackers seeking unpatched vulnerabilities.
• Third Parties: Data breaches increasingly originate from external partners—vendors, clients, and software providers. Even if a CPA firm’s own cybersecurity is strong, weak links among external collaborators can expose sensitive information to significant risks.

CPAs Now Need a Layered Cybersecurity Arrangement 

Ad-hoc security measures are no longer enough. CPA firms must adopt a layered defense strategy—an integrated system of tools, policies, and processes that collectively safeguard sensitive data at every touchpoint. Here’s what modern CPA cybersecurity should include:

• Proactive Patch Management: Regularly update software and firmware to eliminate known vulnerabilities.
• Multi-Factor Authentication (MFA): Implement MFA across all systems and client portals to reduce the risk of credential theft.
• Access Governance: Limit access based on role requirements. Monitor and review access permissions regularly.
• Encryption: Deploy full-disk encryption to protect data at rest and ensure encrypted transmission of data between parties.
• Security Awareness Training: Conduct regular staff training on phishing, ransomware, social engineering, and safe data handling practices.
• Endpoint Protection and Threat Detection: Opt for managed EDR (Endpoint Detection and Response) services to monitor devices in real-time for threat detection and response.
• Backup and Disaster Recovery: Maintain secure, automated, and encrypted backups with tested disaster recovery procedures. 

Simple actions like locking screens when away, using cloud hosting when handling sensitive data remotely, and deleting cache and temporary files weekly can also make a measurable difference.

Above all, CPAs should foster a “culture of cybersecurity”—where data protection is not just IT’s responsibility but part of every employee’s daily work ethic.

Building a strong cybersecurity foundation is not merely about deploying tools—it’s about instilling a firm-wide mindset of security. Partnering with a reputable cybersecurity provider can simplify the process, offering expertise in threat detection, compliance management, and risk mitigation.

The firms that succeed will be those that view cybersecurity not as a burden, but as a vital investment in the trust they deliver to their clients.

To help CPAs stay ahead, Ace Cloud Hosting offers cloud-based endpoint security services, including managed EDR, SIEM, vulnerability assessments, and alignment with the MITRE ATT&CK Framework to counter modern threats.

Book a free consultation today and learn how you can strengthen your cybersecurity posture without disrupting your business operations.