The Internal Revenue Service (IRS) recently released a simplified version of the Written Information Security Plan (WISP), specifically designed to help tax and accounting professionals develop plans to protect critical business data and information. As cyber threats become increasingly sophisticated, the need for robust data protection measures is more crucial than ever.
Why Every Tax and Accounting Firm Needs a WISP
All businesses that offer accounting or tax preparation services are required to have a WISP document in place. Consequently, the IRS, state tax agencies, and the broader tax industry continue to urge tax and accounting firms to develop and implement a security plan. This document serves as a blueprint for how a firm safeguards sensitive client information, outlines security controls, and details procedures and policies necessary to maintain data integrity.
Even if you don’t operate an accounting and tax firm, it’s important to understand the efforts your provider must put in place to protect your information. A WISP not only helps comply with federal regulations but also protects your firm from the financial and reputational damage that can result from a data breach.
What is a WISP?
A WISP document contains an organization’s security controls, procedures, and policies. It details how confidential client data is protected by the organization, including which members of the organization are responsible for safeguarding digital data. Ultimately, the WISP document serves as a guide or roadmap for the security of a firm’s data, information architecture, and IT management.
Given the complexity of information technology and cybersecurity, developing and implementing a WISP document requires considerable expertise in data security and information systems, in addition to knowledge about the latest IRS guidelines. Enlisting the support of a technology partner can be invaluable in identifying and sourcing necessary cybersecurity protections.
Protecting Client Privacy and Highly Valuable Business Data
In today’s complex digital landscape, business and client data are valuable yet increasingly vulnerable assets. The IRS has reported that many tax professionals continue to struggle with developing a written security plan. This challenge often stems from the complexity of information technology and a lack of experience with cybersecurity.
To encourage more uptake of WISP planning, the IRS rolled out the “Protect Your Clients; Protect Yourself” campaign to help educate tax professionals on data security and other topics relevant to the WISP. The new guidelines are detailed in a 28-page sample document that illustrates how smaller practices can create data security plans that include data protection initiatives, from risk management to security breach procedures.
Key Components of a WISP
Developing a WISP involves more than just writing down a set of policies. It requires a thorough understanding of your firm’s unique risks and vulnerabilities, as well as a strategic approach to implementing and managing security measures. Some key components of a WISP include:
- Risk Assessment: Identify potential threats to your firm’s information security and evaluate the impact of those threats on your operations. This includes assessing both internal and external risks, such as employee errors, cyberattacks, and natural disasters.
- Data Classification and Access Controls: Determine which types of data are most sensitive and implement access controls to ensure that only authorized personnel can view or handle that data. This helps prevent unauthorized access and reduces the risk of data breaches.
- Incident Response Plan: Outline the steps your firm will take in the event of a security breach or data loss. This should include procedures for containing the breach, notifying affected parties, and restoring lost or compromised data.
- Employee Training and Awareness: Educate your employees about the importance of information security and their role in protecting client data. Regular training sessions can help reinforce best practices and keep your team informed about the latest security threats.
- Vendor Management: Work with third-party vendors who handle your firm’s data, ensuring they adhere to the same high standards of security and compliance. This includes reviewing their security policies and incorporating specific security requirements into your contracts.
Get Support Developing Your WISP
To get started, the simplified WISP guidelines highlight five Federal Trade Commission (FTC) guidelines for firms:
- Designate one or more employees to coordinate the information security program.
- Identify and assess the risks to customer information in each relevant area of the company’s operation, and evaluate the effectiveness of the current safeguards for controlling the risks.
- Design and implement a safeguards program, and regularly monitor and test it.
- Select service providers that can maintain appropriate safeguards by ensuring your contract requires them to maintain safeguards and oversee handling of customer information.
- Evaluate and adjust the program considering relevant circumstances, including changes in the firm’s business or operations, or the results of security testing and monitoring.
The Role of Technology Partners in WISP Development
Given the complexity of modern cybersecurity threats, many tax and accounting firms choose to partner with technology experts to develop and maintain their WISP. At Carmichael Consulting, we specialize in providing tailored IT solutions that address the specific needs of tax and accounting professionals. Our team can help you navigate the intricacies of WISP development, from conducting risk assessments to implementing advanced cybersecurity measures.
Our approach includes ongoing monitoring and maintenance to ensure your WISP remains relevant and effective as your business evolves. We also stay informed about the latest IRS guidelines and cybersecurity trends, so you can be confident that your firm’s data protection strategies are up to date.
Protecting Your Firm’s Future
In a world where cyber threats are constantly evolving, having a WISP is more than just a regulatory necessity—it’s a crucial investment in your firm’s future. A well-crafted WISP not only helps you comply with IRS and FTC regulations but also protects your firm from the financial and reputational damage that can result from a data breach.
By prioritizing information security and working with a trusted technology partner like Carmichael Consulting, you can safeguard your firm’s critical data, ensure compliance, and build trust with your clients. Whether you’re starting from scratch or updating an existing WISP, our team is here to guide you every step of the way.
Ensure you have a comprehensive WISP in place that will flex and scale with your business throughout 2023 and beyond. If you’d like to walk through the nuances of how to set up a security plan, including cybersecurity monitoring and safeguards that make the most sense for your firm, give us a call at 678-719-9671 (choose Option 2) or email [email protected].
