Data Security Measures Every CPA Should Demand from Accounting Outsourcing Providers in 2025

As you consider outsourcing accounting functions to grow your firm in 2025, one question likely keeps you up at night: ‘Will my clients’ sensitive financial data remain secure?’ In an era where cyberattacks occur every 39 seconds, protecting client information is more critical than ever.

Fortunately, the outsourcing industry has responded to these concerns diligently, prioritizing robust security measures to protect client data. Partnering with the right outsourced service provider ensures that CPA and accounting firms can expand their service offerings while safeguarding client data. The future of accounting lies not in choosing between growth and security, but in embracing partners who excel at both.

This balanced approach – leveraging outsourcing’s efficiency while maintaining fortress-like data protection, positions forward-thinking firms to thrive in 2025 and beyond.

1.From Transfer to Storage: How Encryption Protects Client Data at Every Stage

• End-to-end encryption
  Remote service providers ensures that all sensitive information is encrypted during communication and data exchanges, which prevents unauthorized parties from intercepting or accessing your clients’ financial information.

• AES (Advanced Encryption Standard)
  Utilization of AES-256 encryption by your offshore team guarantees secure transmission often through Dropbox (a GDPR compliant software), which meets the highest industry standards for data protection.

2.Multi-Factor Authentication (MFA) to Secure Access

• Two-factor authentication (2FA)
  Outsourced providers implement 2FA, requiring users to verify their identity through multiple methods (such as a password plus a mobile verification code). This means that even if credentials are compromised, unauthorized users still can’t access your clients’ tax returns, financial statements, or personal information.

• Biometric verification
  For added security, remote partner uses biometric methods like fingerprint or facial recognition to ensure only authorized individuals access critical systems. 

3.Adherence to Regulatory Standards and Compliance

• SOC 2 type II compliance
  Offshore service providers undergo rigorous audits under SOC 2 Type II, ensuring their control systems meet high standards for security, availability, processing integrity, confidentiality, and privacy.

• General data protection regulation (GDPR)
  For accounting firms with international clients, in the EU and the UK, outsourced service providers need to comply with GDPR regulations, ensuring stringent data protection practices are followed.

4.Regular Security Audits and Consistent Monitoring

• Regular security audits
  Outsourced accounting providers conduct regular security audits to identify potential vulnerabilities and ensure that systems are up-to-date with the latest security protocols which helps mitigate the risk of data breaches or unauthorized access. 

• 24/7 security monitoring
  Remote service partners offer round-the-clock security monitoring, continuously tracking systems for suspicious activity and responding rapidly to potential threats to keep your data safe. 

Key Security Checklist for Outsourcing Accounting Services

When outsourcing accounting services, ensuring your offshore partner prioritizes security is critical to protecting sensitive client data. This checklist highlights key protocols to verify and ask to check their commitment to safeguarding your information.  

• Does your partner use Multi-Factor Authentication (MFA) for system logins?
• Are encrypted platforms used for secure data transfers?
• Are security patches consistently applied across systems?
• Is USB/external device access restricted?
• Are systems regularly updated to defend against new threats?
• Does your partner conduct quarterly security training for staff?
• Are access permissions reviewed regularly?
• Do they have a response plan for security breaches?
• Are monthly security checks performed for vulnerabilities?
• Is third-party software security verified against industry standards?
• Are access logs monitored for sensitive data?
• Are security policies reviewed periodically for evolving risks? 

5.Cloud-Based Solutions with Advanced Security Features

• Data encryption in the cloud
  Offshore service providers use advanced encryption technologies to ensure that financial data remains safe even if the physical server is compromised. Top-tier outsourced providers rely on cloud services with certifications such as ISO 27001 and CSA STAR, proving their commitment to adhering to the best security practices.

• Automated backups
  Outsourced accounting providers often use automated backup systems to ensure data is regularly saved and can be restored in the event of system failure, preventing data loss. 

6.Legal Protections and Confidentiality Agreements

• Non-disclosure agreements (NDAs) and breach notification procedures
  Outsourced providers enforce strict NDAs within their contracts, legally binding them to maintain the confidentiality of all financial data. They also keep clear breach notification procedures in place, ensuring that your firm is informed immediately in the event of a data breach 

• Data ownership clauses
  Contracts include clauses that guarantee your accounting firm retains ownership of all client data, ensuring clarity in the event the outsourcing relationship ends. 

7.Employee Training and Awareness Programs

• Recognizing phishing and social engineering attacks
  Outsourced providers regularly train employees to identify and respond to phishing attempts and social engineering attacks, minimizing human error that could lead to unauthorized data access. 

• Secure data handling practices
  Remote service providers emphasize on secure data handling, such as safeguarding passwords, avoiding unsecured networks, and securely disposing of sensitive documents.  

8. Incident Response and Data Breach Plans

• Clearly defined incident response policy
  Outsourced providers have a structured incident response policy in place to contain data breaches, investigate causes, and mitigate further risks, ensuring a quick and organized response. 

• Recovery protocols
  With effective recovery procedures in place, outsourced team ensures that your client’s data is restored quickly and securely following an attack, minimizing downtime and financial losses. 

9.How to Evaluate Your Outsourcing Partner's Security

When assessing potential outsourcing partners, consider using this security evaluation framework. Here’s how Infinity Globus measures against these industry-leading standards: 

• Advanced encryption technologies
  We utilize the latest encryption standards, including AES-256, to protect client data both in transit and at rest, ensuring that all sensitive information remains secure from unauthorized access. 

• Advanced biometric authentication
  Beyond standard MFA, we employ cutting-edge biometric verification including facial recognition and fingerprint scanning for critical data access, adding an unmatched layer of security. 

• Strict compliance with global regulatory standards
  Our operations align with key global regulations, such as SOC 2 Type II, and ISO 27001, ensuring that all processes meet the highest industry standards for data security and privacy. 

• Regular security audits
  We conduct frequent, comprehensive security audits to identify and address any potential vulnerabilities, ensuring ongoing protection for your clients’ sensitive data. 

• AI-powered threat detection system
  Our proprietary machine learning algorithms continuously monitor data access patterns and automatically flag suspicious activities in real-time, providing a level of security that goes beyond traditional monitoring systems. 

• Dynamic Data Segregation
  Infinity Globus’ unique data isolation technology ensures complete separation of client data through virtual private clouds, preventing any possibility of cross-contamination between different clients’ information. 

• Data ownership and confidentiality protections
  We include robust non-disclosure agreements (NDAs) and data ownership clauses in all contracts, guaranteeing that your clients’ information remains confidential and secure. 

Discover how we set industry-leading standards in data protection! 

10.Taking the Next Step with Confidence

Selecting an outsourcing partner requires balancing operational needs with uncompromising security standards. As you evaluate potential partners:  

• Request detailed security documentation and certifications 
• Ask specific questions about their response to previous security incidents 
• Consider how their security measures integrate with your existing systems 
• Verify their compliance with regulations relevant to your client base 

At Infinity Globus, we welcome these conversations and encourage accounting firms to thoroughly evaluate our security framework against industry benchmarks and your specific requirements.  

Ready to explore how secure outsourcing can transform your practice? Schedule a security-focused consultation with our team to discuss your specific concerns and requirements. 

11.FAQs

• How can I ensure the security of my clients’ financial data when outsourcing accounting services?
  To ensure security, choose an outsourced provider that follows industry-standard security measures such as end-to-end encryption, multi-factor authentication, regular security audits, and adherence to global regulatory standards (e.g., SOC 2 Type II, GDPR). 
• When comparing outsourcing providers, what security red flags should immediately disqualify a potential partner?
  Red flags include a lack of relevant security certifications (e.g., SOC 2, ISO 27001), unclear data protection policies, no incident response plan, and a history of data breaches. If a provider can’t ensure transparency or accountability in their security practices, they should be disqualified.
   
• Is it safe to store financial data on the cloud when outsourcing accounting functions?
  Yes, top-tier cloud-based providers use advanced encryption technologies, automated backups, and hold certifications like ISO 27001 and CSA STAR to ensure that your data is safe, even in the event of a server breach.
  
  
• How do international data protection laws affect U.S. accounting firms using offshore outsourcing services? International laws like GDPR, local privacy regulations, and cross-border data transfer rules require U.S. firms to ensure offshore partners comply with strict data protection standards. U.S. firms must ensure providers follow proper protocols and secure data with legal safeguards in place. 
• What is the role of employee training in maintaining data security in outsourced accounting services?Regular training ensures employees can recognize phishing, social engineering, and other security threats. It also covers secure data handling practices and ways to respond effectively to potential breaches, minimizing human error. 
• How can I explain outsourcing security measures to my clients who express concerns? You can reassure clients by explaining that reputable outsourcing providers implement strong security protocols, such as encryption, multi-factor authentication, and compliance with industry certifications like SOC 2 or ISO 27001, which ensures data protection and privacy. 
• What happens if a data breach occurs with an outsourced accounting provider?Ans- In the event of a breach, outsourced providers must follow clear breach notification procedures, informing your firm immediately, so you can take timely corrective actions to mitigate any potential damage. 
• How does Infinity Globus handle data ownership and confidentiality when working with outsourced accounting clients?Infinity Globus includes clear data ownership clauses in all contracts, ensuring that your firm retains full ownership of client data. We also enforce strict non-disclosure agreements (NDAs) to legally bind us to confidentiality, safeguarding all financial data throughout our partnership.