FTC rule compliance requires more than policies for tax and accounting firms |
The Federal Trade Commission’s Safeguards Rule applies broadly to tax preparation firms, CPA practices, bookkeepers, and financial advisors that handle sensitive customer information, requiring both administrative and technical safeguards to protect client data. While firms must maintain written security programs, conduct risk assessments, designate responsible personnel, and oversee third-party vendors, compliance also depends on practical infrastructure controls such as encryption of data at rest and in transit, multi-factor authentication, access controls, secure data disposal, activity logging, vulnerability testing, change management, and incident response planning. The article emphasizes that hosting providers can support the technical side of compliance through secure, monitored environments, but responsibility for governance, policies, risk management, and regulatory oversight remains with the firm itself. Experts caution that compliance cannot be achieved through technology alone, as firms must continuously evaluate how client data is stored, accessed, and protected under the FTC’s requirements.
