Increasing risks

How much does a data breach cost? The average has reached an all-time high of $4.35 million, according to the newly released “Cost of a Data Breach Report 2022.” The report, published by independent research group Ponemon Institute, also found that 83% of respondents have experienced more than one data breach.

Another key finding is that the average cost of a data breach increased by roughly 13% during the pandemic. Why? One reason is the increase in remote working arrangements. Many organizations now have sensitive data stored in more places than ever before — including laptops, cloud-based storage, email, portals, mobile devices and flash drives — providing many potential areas for unauthorized access.

Ransomware attacks are also on the rise, in part due to geopolitical instability. According to the study, ransomware attacks were up 41% in 2022 compared to the previous year. These attacks cost organizations an average of $4.54 million per incident in 2022, excluding any ransom paid to the perpetrator. Ransomware attacks generally take longer to detect and contain than other types of data breaches.

Targeted data

Hackers may try to steal valuable information about your organization’s employees and customers. Examples include payment card data, protected health data and personal identifiable information, such as phone numbers, addresses and Social Security numbers.

Another target may be valuable intellectual property, such as customer lists, proprietary software, formulas, strategic business plans and financial data. These intangible assets may be sold or used by competitors to gain market share or competitive advantage.

Risk assessment

As the frequency and severity of cyberattacks have increased, data security has become a critical part of the audit risk assessment. In recent years, the Public Company Accounting Oversight Board (PCAOB) has interviewed auditors of companies that have experienced a cybersecurity breach.

These interviews reveal that audit firms provide varying levels of guidance, both when assessing risk at the start of the engagement and when uncovering a cybersecurity incident that occurred during the period under audit or during audit fieldwork. For example, auditors usually ask management what’s being done to understand, detect and prevent computer system breaches.

Another key finding of the PCAOB research is that the costs associated with cybersecurity breaches may not always be apparent. A major cybersecurity breach can cause more than lost profits; it may also result in a loss of customers, reputational damage and even bankruptcy.

We can help

Though PCAOB’s research focuses on public companies, any organization can be the victim of a cyberattack. And the effects may be even more devastating for those with fewer resources to absorb the losses and assign dedicated staff to respond to breaches. Our firm is atop the latest cybersecurity trends. Our auditors can help your organization assess its cyber risks and improve the effectiveness of internal controls over sensitive data. Contact us for more information.

Data security is a critical part of the audit risk assessment. If your financial statements are audited, your audit team will tailor their procedures to answer critical questions about cyber risks and the effectiveness of your internal controls. While conducting fieldwork, they’ll assess how your practices measure up and whether your company has weaknesses that may require additional inquiry, testing and disclosure.

Is cybersecurity a priority?

Most companies today view cybersecurity as a business problem, not just as an information technology (IT) issue. During the audit process, it’s important to identify the “crown jewels” of your company’s data assets, and then consider how your management team evaluates, manages and responds to cyber risks and cybersecurity incidents.

People are often the weakest link in cybersecurity. So, auditors will evaluate your company’s training, awareness and accountability policies to ensure that sensitive data is kept safe. Those policies may need to be regularly updated as 1) hackers get more sophisticated and find new ways of breaking into systems, and 2) your business environment changes.

For example, remote working arrangements during the COVID-19 pandemic have resulted in new risks as employees access data from less-secure home networks. So companies may need to modify their practices to maintain effective data security.

Auditors also consider the tone at the top of your organization. Cybersecurity should be integrated into an organization’s values and goals. Responsibility shouldn’t fall solely in the hands of your company’s IT department. After all, if your company can’t keep its intellectual property and customers safe, its ability to operate will ultimately be diminished over the long run.

What’s important to investors and lenders?

To date, the Public Company Accounting Oversight Board (PCAOB) hasn’t found any material misstatements on a public company’s financial statements as a result of a cybersecurity breach. So, stakeholders generally have confidence in the ability of auditors to evaluate and identify cyber risks.

However, audit committees and other external stakeholders recognize that there’s a risk that future cyberattacks may affect financial reporting. And they expect auditors to actively communicate about cybersecurity measures and the costs associated with breaches. The full cost of a data breach — including response and reputational damage — may not always be apparent. Financial statement disclosures should be as accurate, timely and comprehensive as possible.

An agile approach

Many traditional audit risks — such as supply chain and related party risks — tend to be fairly constant and predictable over time. But cyber risks are constantly evolving. We have experience evaluating and disclosing data security practices. Each accounting period, our audit team will take a fresh look your company’s cyber risks in today’s marketplace and modify our audit procedures as necessary. We can also help get your policies and procedures back on track, if they haven’t kept up with the times. Learn about our IT Consulting Services, here.

Now is the time to make sure your have the proper internet bandwidth in the home so it can be shared with the family members using it while connected to the router/internet. Virtual meetings, video calls, streaming media, and other services can consume bandwidth. Make sure you work with your Internet Service Provider (ISP) to ensure you have subscribed to a suitable internet service package to support your internet coverage and bandwidth demands.

There’s nothing more frustrating than PCs, tablets, Smart TVs, Rokus, smartphones, iPhones, thermostats, security systems, doorbells, and other connected technologies fighting over bandwidth which can cause service interruptions during critical business or school times.

Our IT Consultants would like to offer a few tips:

• If your internet signal is weak or lagging, restart your router.
• Proximity can impact Wi-Fi – moving closer to the router should improve connectivity.
• Run internet speed tests to compare your download/upload speeds to the service speeds you are subscribed to.
• It’s possible you may need to upgrade your router, your subscription, or add additional hardware to get the speeds and coverage your home demands.

Technology has become increasingly important and Edelstein is here to provide IT solutions for you. Call Mike Bisso directly at (617) 478-3486 or email him at mbisso@edelsteincpa.com to find out how our IT Consulting Services team can assist you.

Our IT Consultants have handheld cameras, turrets, and mid and long range cameras that you can install in your workplace.  The following benefits will assist with the healthy return of your team members:

• 0.5° – 0.9° F Accuracy
• Smart Measurement
• Mask Enforcement
• Automated Voice
• Alarms
• Rapid Screening

These cameras are high efficiency, being able to detect the temperatures of up to 30 people at one time. They are also safe and contactless, with no-contact temperature measurement and mountable options. These are excellent choices to consider when it comes to keeping COVID-19 out of your workplace.

Our IT Consultants are a resource for you while you continue to put your plans together for the safe and comfortable return of your employees. If you’re interested in learning more about this camera or the other ways we can be of support, contact Mike Bisso at 617-227-6161 or email mbisso@edelsteincpa.com 

Open Sesame. New to the market are touch-less kiosks detecting body temperature and facial recognition.  Flexible technology allows you, the employer, to set the parameters for those trying to enter the office.

There IS an APP for that! Apps are available for employers to screen employees for symptoms and set parameters for workplace safety so that their office will limit the exposure to COVID-19 and some other infectious illnesses – all from a Smartphone.

Hold the Door? The idea of grabbing door handles has changed for many since the pandemic.  Voice or “hand wave” activated technologies allow doors to open hands-free limiting the spread of viruses on doors and handles.

Our IT Consultants are ready to work with you to ensure your business is prepared for a safe and smooth return.  Connect with Mike Bisso to create a strategy together.

Here are a few tips while shopping this holiday season:

1. Never use a debit card that is linked to your cash to make purchases.  Always use a credit card or a credit card service to make purchases like PayPal and Venmo.
2. Take advantage of using store credit cards to make purchases at their stores such as Amazon, Macy’s, Home Depot etc.
3. Always, always, always use multi-factor authentication when possible with your banking and financial websites, social media, email etc.  Make them prove it’s you.
4. Turn on alerts especially on your banking and financial websites for transactions.
5. When shopping online at not-so-mainstream stores be leery and look for clues such as a phone number, address etc. so you can get in touch with them if there is an issue.  If an online website only offers an email address for contact, you should consider skipping the purchase.
6. Never, ever, ever make an online purchase on Free, Public, Open Access Wi-Fi.
7. Ship and track packages to a secure location!  Package thefts increase substantially around the holidays.
8. Monitor your bank and credit card statements.
9. Create secure passwords for all accounts and NEVER share passwords.
10. Be careful before you click on promotional email links…they may not take you where the link says you are going!

Edelstein offers IT Consulting Services and can help your business with Security Awareness and IT Security.

Learn about the ways we can work with your business here.