Security Isn’t a Feature – Why You Should Treat It as the Foundation for Offshore Trust

Excel continues to be one of the most common tools that accountants across the world use. But did you know that according to a Threat Insights Report, for the last quarter of 2021, the HP World Security detected a 588% increase in Excel add-in-related attacks? These attacks infect computer systems and networks with malware.

As digitalization, Artificial Intelligence, and automation continue to be some of the new and critical emergences in the accounting industry, the risks continue to grow at par. And the consequences of the lack of adequate security protocols can be grave. Accounting firms that fail to protect client data will now be penalized under the Privacy Legislation Amendment Bill 2022. The bill has maximum penalties for serious or repeated privacy breaches, from $2.2 million penalty to whichever is greater: 

• $50 million 
• Three times the value of any benefit obtained through the misuse of information
• 30 per cent of a company’s adjusted turnover in the relevant period. 

Security concerns continue to be one of the most pressing issues, especially when considering offshoring. 

“Will my clients’ data be safe if it leaves my office?”
“Can an offshore team protect sensitive information as we do?”

While the questions are valid, here’s the truth: in most cases, offshore partners have stronger security protocols as compared to small accounting firms. These partners have a larger number of clients whom they need to take care of the financial data. They have a higher chance of financial and reputational damage. 

That is why security isn’t just a feature when you are offshoring; it is the foundation of offshore trust. 

Why do offshore partners have more security protocols than small accounting firms? 

Offshore partners are more advanced when it comes to security measures. Here are some common reasons why: 

1. Dedicated IT and security infrastructure:

Small CPA firms have anywhere between 0-20 people. They usually rely on basic firewalls and protected drives, and maybe a cloud-based accounting platform. Offshore partners, on the other hand, have dedicated IT environments designed for handling international client data. They invest in password-protection systems (RoboForm, for example), VPNs, dumb terminals, secure servers, and more.

2. Compliance with Global Standards

Offshore partners like Finsmart Accounting cater to businesses based in the US, UK, Singapore, and more. They are aligned with SOC 2, ISO 27001, and GDPR. Hence, they need to be audited for compliance. They are far more compliant than small firms can implement on their own. 

3. Restricted Access Protocols

In small firms, teams and firm owners can access client files directly from their desktops or shared folders. Offshore partners enforce role-based access control. This means that the employees get access to the data that is required for their tasks. Nobody can access data anymore than they are given access to. This ensures the safety of the information and that multiple eyes see it before it goes to the clients. 

4. Round-the-clock Monitoring: 

Cybersecurity isn’t just a “once-in-a-while” exercise. Offshore partners run 24/7 monitoring and logging systems, working in overlapping hours. They help ensure that every access, download, or login attempt is tracked. This is rarely feasible for a small accounting firm with limited staff. 

5. Maintaining higher standards helps prevent bigger consequences

For offshore teams, security is not just another feature; it is business-critical. One breach could lead them to lose multiple clients and damage their global reputation. That’s why they embed security in every aspect of their operations. For offshore firms, this is a survival mechanism.

What many accounting firms don’t realize is that sometimes moving offshore is actually an upgrade in security, not a downgrade. 

Security isn’t a checkbox; it is the foundation of accurate results

Security is NOT one of the many features that your offshore partner has. If you are treating it like that, you are setting your business up for something terrible. Security is the foundation of trust. Without it, there is no partnership, no growth, and no long-term client relationship.

A business partnership is similar to what you build for yourself personally – like a house. Would you build a house on weak foundations, just because you got good walls? Similarly, you shouldn’t build an offshore partnership without ensuring rock-solid security. 

When partnering with offshore firms, this is what you should expect in terms of security:

1. Physical Security

• Biometric access to offices
• CCTV monitoring
• Restricted entry zones for client-data teams
• No personal devices allowed in secure work areas
  

2. Network and System Security

• Encrypted VPNs for all client data access
• Two-factor authentication (2FA)
• Enterprise firewalls and anti-malware protection
• Regular vulnerability scans and penetration tests
  

3. Data Handling Policies

• Role-based access control
• Data masking and anonymization wherever possible
• “Need-to-know” protocols—only relevant staff access client files
• Prohibition of removable storage devices
  

4. Employee Security Practices

• Mandatory security training and certifications
• Regular phishing simulation tests
• Signed NDAs and confidentiality agreements
• Clear escalation policies for suspicious activities
  

5. Compliance and Certifications

• SOC 2, ISO 27001, or equivalent frameworks
• GDPR compliance for firms handling EU clients
• HIPAA compliance for firms handling health-related data
  

“Do you have security?” This shouldn’t be the only question you ask when evaluating offshore partners. Dig deeper into these layers. 

What happens when you treat security lightly?

When you ignore security practices, it leads to more than cyberattacks, phishing, and malware attacks. For accounting firms, the 3 top consequences include: 

1. Loss of Client Trust: A single incident can permanently damage your reputation. In a referral-driven profession like accounting, trust is your currency.
   
2. Regulatory Penalties: From IRS data rules to GDPR, breaches can result in heavy fines and legal complications.
   
3. Operational Disruption: Even a short downtime from a breach can delay filings, erode efficiency, and frustrate clients.
   

Partnering with an offshore provider that embeds security in operations actually helps firms reduce these risks rather than increase them.

Remember, your clients are also concerned about where their financial data is going. If you’re planning to offshore, you need to communicate confidently about why security is stronger with your partner than it would be internally.

Here’s how firms can build that confidence:

• Educate clients upfront about your offshore partner’s compliance and security certifications
  
• Be transparent about data handling—where it’s stored, who can access it, how it’s monitored
  
• Highlight continuous monitoring as a value-add, not just a precaution
  
• Showcase your partner’s track record with global clients as proof of reliability

Want to know how offshoring can help? Book a free consultation: https://finsmartaccounting.com/free-consultation/