What regulations apply to CPA firms?

1. FTC Safeguards Rule

Who it applies to: All CPA firms that offer services to individuals, such as tax preparation, financial planning, or credit counseling, are considered "financial institutions" under the Gramm-Leach-Bliley Act (GLBA) and are subject to the FTC Safeguards Rule.

Requirements:

• Develop, implement, and maintain a written information security program.

• Designate a qualified individual to oversee the program.

• Conduct regular risk assessments.

• Implement safeguards such as access controls, encryption, and secure data disposal.

• Regularly monitor and test the effectiveness of security controls.

• Train staff on information security best practices.

• Ensure service providers maintain appropriate safeguards.

2. Payment Card Industry Data Security Standard (PCI DSS)

Who it applies to: CPA firms that accept or process credit card payments are subject to PCI DSS compliance.

Requirements:

• Maintain a secure network (e.g., firewalls, secure configurations).

• Protect cardholder data through encryption and secure storage.

• Implement access control measures (e.g., unique IDs, limited access).

• Regularly monitor and test networks.

• Maintain an information security policy.

3. Health Insurance Portability and Accountability Act (HIPAA)

Who it applies to: CPA firms that provide services to healthcare organizations or handle electronic protected health information (ePHI) must comply with HIPAA.

Requirements:

• Sign a Business Associate Agreement (BAA) with covered entities.

• Implement administrative, physical, and technical safeguards to protect ePHI.

• Ensure confidentiality, integrity, and availability of ePHI.

• Conduct regular risk analyses and implement mitigation strategies.

• Develop and enforce policies and procedures for HIPAA compliance.