Managing Risk in Accounting Firms

Security is at the top of everyone’s mind this tax season. In fact, managing risk has been a hot topic for several years now. In a 2014 whitepaper, Boomer Consulting President Sandra Wiley discussed steps firms are taking to protect themselves from risk. Called “Protect Your Firm: Knowledge, Process, Policy and Action,” the whitepaper outlines four areas for firms to focus on.

Knowledge

Accountants’ greatest asset is their professional expertise. However, in complex and quick-changing regulatory environment, even professionals can struggle to keep up. Research sources are often scattered across different platforms, and client demands can make finding time to stay informed more difficult. Finding a research platform that integrates with a standard browser search can help streamline the process. In addition, knowledge management software can help keep your firm’s expertise organized and accessible.

Process

Human error can be an embarrassing problem for a professional whose reputation is based on trust and expertise. You can reduce this risk by reducing data entry wherever possible, through automation. Manual data entry is still a popular method of getting data into your system, but can introduce mistakes. Since you’ll never eliminate all errors, you should design processes to identify errors earlier in the process. Streamlining the preparation and review process can lead to greater accuracy in addition to quicker turnaround time.

Policy

Data security is, of course, what most people think about when they consider managing risk in accounting firms. In addition to making sure your data is stored securely, make sure to enact policies to create a culture of security in your firm. Require secure passwords and periodic password changes, and have policies in place for hardware and storage media. In addition, your procedures should cover how often to train staff on security and what to do in case of a data breach.

Firms need to be vigilant about protecting not just their data but also their reputations. One simple misstep can damage a trust relationship with clients irreparably. That’s why its important to have plans in place and continually re-evaluate security measures. Be sure to read the whole whitepaper, which includes a 7-step action plan for protecting your firm.

 

 

AUTHOR

Aimee Hall

Product Marketing Manager at Wolters Kluwer Tax & Accounting

All stories by: Aimee Hall

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