Phishing and Accounting Scams: A Guide for Accountants
Phishing is a problem costing businesses billions of dollars every year. The FBI reported that in 2021, more than 320,000 people in the U.S. were victims of phishing scams alone. As a result, the issue has become a growing concern for many accountants and other business professionals.
So what is phishing, and why should accountants care? Phishing is an online scam where criminals attempt to steal your personal information by pretending to be a legitimate company or individual.
The consequences of falling for a phishing attack can be devastating. In addition to losing money, you could also end up with a damaged reputation and lose customers. That's why accountants must know how to protect themselves from phishing scams.
How phishing works
Phishing uses deception to trick people into providing confidential information or clicking malicious links. It typically begins with an email, text message or website that looks legitimate and contains compelling content.
Criminals can create these messages to appear as if they are coming from a reputable company, financial institution, government agency or someone you know and trust. The message might claim that you need to update your account information or click a link to verify an order.
Who is carrying out phishing attacks, and from where?
Who is behind all these phishing attacks, and where are they originating? It's possible criminals responsible for such malicious activities could be from any part of the world. However, many cases are located in countries with weak or non-existent cybersecurity laws.
This enables them to take advantage of vulnerable citizens and businesses with ease. Plus, the anonymity afforded by certain parts of the world makes tracking these perpetrators virtually impossible. So, it's essential to remember that these criminals originate from not only one area but many different parts of the globe.
What is the purpose of phishing attacks?
The overall purpose of a phishing attack is to gain access to personal or financial information, like bank account numbers, passwords and credit card details. Once the criminals have accessed this data, they can use it in various ways — from stealing money directly to committing identity theft.
In some cases, cybercriminals might even use stolen data for extortion. For instance, they might threaten to release sensitive information online unless the victim pays a ransom.
Who are the most prominent targets?
Phishing scams target almost anyone online — young and old, tech-savvy and not so tech-savvy.
In particular, email phishing is a key form for use against businesses or people using online banking, as this type of user often has the most to lose. They are also particularly interested in targets willing to share their personal information without double-checking if a request is from a verified and trusted source.
That being said, professionals in the finance industry and even government employees can be at risk for phishing attacks. Sizeable companies are also a potential target for phishers trying to access records or highly sensitive data. Again, vigilance is the best defense against phishing scams.
How phishing accounting scams affect professionals and firms
Accountants have access to sensitive financial information that is attractive to criminals. If a hacker could gain access to this data, they could use it for identity theft, fraudulent transactions and other criminal activities.
For accounting firms, the risks are even more significant. A successful phishing attack could lead to a data breach that could cost the firm money, customer trust and even its license. It could also lead to loss of business and reputational damage when clients find out their data has been compromised.
Keeping clients safe
As an accountant, it's important to stay vigilant and educate your clients about the risks of phishing. Make sure they know that if they ever receive a suspicious message or link, they should not click on it or provide any information.
Also, ensure your firm has comprehensive security measures to protect against phishing attacks. That includes using firewalls, antivirus software and multi-factor authentication whenever possible.
Clients need to be aware of the latest phishing scams and be able to recognize them. Educate clients on the red flags of phishing, including:
- Messages with poor grammar or typos. Many phishing emails are written by people who don't speak the target language.
- Requests for personal information. Legitimate companies will never ask for your credit card details or passwords via email.
- Unfamiliar senders. Be wary of emails from unknown senders, even if they appear to be from a trusted company.
- Links to unfamiliar websites. Only click on links in emails that you are sure are legitimate.
- Messages that create a sense of urgency. Often, scammers create a false sense of urgency to get people to act quickly.
By encouraging clients to remain vigilant and taking steps to protect their information, accountants can help keep their clients — and their businesses — safe from phishing scams.
How to prevent email phishing attacks
To protect against phishing attacks, it's crucial to understand how they work and what steps can be taken to keep your clients safe. Here are some best practices to help you prevent phishing scams:
- Educate your clients. Make your clients aware of the risks of phishing and provide resources to help them recognize and avoid scams.
- Verify suspicious emails. If you suspect a message is not legitimate, carefully check the sender's email address, website URL and other details to ensure it's valid.
- Keep security software up-to-date. Update your system with the latest antivirus, anti-malware and firewall software to protect against malicious attacks.
- Be proactive. Monitor your accounts for any suspicious activity and report it promptly to the authorities or your IT staff.
Reduce the risk of phishing
Phishing and accounting scams are a serious threat to businesses and individuals alike. They can result in data breaches, loss of money and even criminal activities like extortion. As an accountant, it's vital to understand the risks and protect your clients from phishing attacks. That includes educating them about the dangers of phishing and keeping your security software up-to-date.
Through proactive monitoring and implementing the best practices for accounting security above, you can help keep your clients safe from phishing scams. You'll also protect your reputation and business in the process.
Caseware features industry-leading security measures to ensure your practice runs safely and securely. Learn more about how Caseware's secure environment can help your business stay protected.
Federal Bureau of Investigation: "Internet Crime Report 2021."