Secure File Sharing for Accountants and Accounting Firms: A Comprehensive Guide

Secure File Sharing for Accountants and Accounting Firms: A Comprehensive Guide

Accounting firms are moving away from traditional paper-based workflows and embracing cloud-based technology for their day-to-day operations. With this shift comes the need for secure file sharing methods that protect sensitive financial data. In this blog post, we will explore accounting firm workflows, secure file sharing between accountants and their clients, and the risks inherent in sharing files with colleagues and clients. We will also review different file sharing methods and “must-have” capabilities and features to help accounting firms choose the best secure file sharing solution.

Accounting Firm Workflows

Accounting firms can vary widely in size but all work with multiple clients, each with unique—and very sensitive—financial information. Effective accounting firm workflows require efficient communication and collaboration between accountants and their clients. This is where secure file sharing comes into play. Secure file sharing allows accounting firms to easily exchange sensitive financial data with clients while ensuring that the data remains confidential.

For example, accountants may need to request financial documents from clients to complete tax returns or review financial statements. In the past, this process involved mailing, overnighting, or faxing documents back and forth, which was time-consuming, expensive, and unsecure. While email and file transfer protocol (FTP) emerged and made file sharing more efficient, both solutions have considerable security and functionality limitations. With secure file sharing methods, however, clients can share sensitive client information securely, in compliance with data privacy regulations and standards, and with a full audit trail that tracks and records all file activity. In addition, secure file sharing solutions help accounting firms comply with data protection regulations, such as GDPR and HIPAA. By using encryption, access controls, and other advanced security features, accounting firms can reduce the risk of data breaches and unauthorized access to sensitive financial data that can lead to compliance violations, litigation, customer and revenue loss, and brand erosion.

Types of Accounting Content

Accounting content varies in type and sensitivity but ultimately all of it should be shared securely to protect a client’s privacy. A secure file sharing solution ensures accounting content is kept confidential and safe from unauthorized access. These types of accounting content include financial statements, tax returns, audit reports, payroll information, PII/PHI, and client data. Let’s take a closer look:

Financial Statements

These documents provide a snapshot of a company’s financial performance over a specific period. They include balance sheets, income statements, and cash flow statements. These documents contain sensitive financial information, including revenue, expenses, and profit margins, and must be kept confidential to maintain the integrity of the company’s financial information.

Tax Returns

Tax returns are another critical type of accounting content that should only be shared using a secure file sharing solution. Tax returns contain sensitive information about an individual or company’s income, deductions, and taxes paid, which must be kept confidential to prevent identity theft, fraud, or even a public relations scandal. A secure file sharing solution ensures that tax returns are only accessible to authorized personnel, protecting the company’s financial information from unauthorized access.

Audit Reports

Audit reports are used to verify the accuracy and completeness of a company’s financial statements. These reports include detailed analyses of the company’s financial performance and must be kept confidential to maintain the integrity of the audit process. A secure file sharing solution ensures that audit reports are only accessible to authorized personnel, ensuring the audit process remains impartial and unbiased.

Payroll Information

Payroll information is another critical type of accounting content that should only be shared using a secure file sharing solution. Using secure file sharing to share payroll information ensures that this sensitive content is only accessible to authorized personnel, ensuring that employee privacy is maintained. Payroll information includes employees’ personally identifiable information, salaries, bonuses, deductions, and taxes withheld, which must be kept confidential to protect and preserve data privacy.

Client Data

Client data is a broad category of accounting content that includes information about clients’ financial information, including bank statements, investment portfolios, email correspondence, payment information, and personally identifiable information. A secure file sharing solution ensures that client data is only accessible to authorized personnel, maintaining client confidentiality and trust.

File Sharing Risks

Accounting firms face numerous risks when sharing sensitive financial information with clients or trusted third parties like auditors, regulators, and consultants. File sharing risks include data breaches, cyberattacks, insider risk, and noncompliance with regulations. Accounting firms must mitigate these risks and ensure the security and privacy of their client’s information.

Data breaches are a significant risk associated with file sharing, and accounting firms must take steps to prevent them. A data breach can occur due to various factors, including weak passwords, unsecured networks, or phishing attacks. The consequences of a data breach can be severe, including reputational damage, loss of business, and legal and financial liabilities.

Cyberattacks are another significant risk associated with file sharing, and they can come in various forms, including malware, ransomware, or denial-of-service attacks. Accounting firms must follow cybersecurity best practices, including using a secure file sharing solution, to prevent cyberattacks. These include cybersecurity awareness training, advanced threat protection (ATP), firewalls, and much more.

Cybersecurity threats such as malware, man-in-the-middle attacks, phishing, and ransomware attacks, are significant risks that accounting firms must consider when sharing sensitive financial information with clients. Malware can infect systems, steal data, disrupt business operations, or allow attackers access to sensitive information. Man-in-the-middle attacks can intercept communications between parties and steal data or insert malicious content. Phishing attacks can trick users into revealing sensitive information or clicking on links that download malware onto their devices. Ransomware can encrypt data, and the systems holding that data, and demand a ransom payment for the decryption key.

Insider risk, including human error, theft, and sabotage, is another significant risk associated with file sharing. Employees may inadvertently send sensitive financial information to the wrong recipient or fail to take appropriate security measures when sharing files. A disgruntled employee may steal sensitive content and share it with a competitor or post it online. Accounting firms must train their employees on best practices for secure file sharing and implement technologies, processes, and protocols to prevent accidental disclosure of sensitive information.

Noncompliance with regulations is another significant risk associated with file sharing. Accounting firms must comply with various data protection laws, including the Gramm-Leach-Bliley Act (GLBA), the General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), etc. Failure to comply with these regulations can result in financial penalties and fines./p>

Secure File Sharing Between Accountants and Clients

With the increasing risk of data breaches and cyberattacks, it is vital that accounting firms use a secure file sharing solution when serving their clients to protect sensitive financial information from unauthorized access. Here is a short list of critical capabilities and features a secure file sharing solution should have:


Encryption is a fundamental aspect of secure file sharing, as it helps protect content from interception and unauthorized access. Encrypted data is converted into a code that can only be deciphered with a specific key or password. This ensures that even if the data is intercepted, it cannot be read or accessed by anyone who does not have the key. Content should ideally be encrypted in transit and at rest, leveraging the highest levels of enterprise-grade encryption, namely in TLS 1.2 encryption in transit and AES-256 encryption at rest.

Mitigate Risk of Data Breaches

Data breaches are a significant concern in financial services, including the accounting industry, as the content accountants share with their clients contains very sensitive information that, if compromised, can be used to commit fraud and identity theft. A data breach can result in financial losses, reputational damage, and legal liability. A secure file sharing solution helps mitigate this risk by providing advanced security features such as access controls, firewalls, and intrusion detection systems. These features help prevent unauthorized access to sensitive financial data, ensuring that confidential information remains private.


Authentication is another critical aspect of a secure file sharing solution, as it verifies the identity of the user accessing the data. Multi-factor authentication, for example, requires users to provide a password and a unique code sent to their mobile device or email, providing an extra layer of security against unauthorized access.

Different File Sharing Methods

There are several file sharing methods available for accounting firms. These include email, cloud-based file sharing, client portals, and virtual data rooms. Each method has advantages and disadvantages, and accounting firms must carefully evaluate their options to find the best solution for their needs.


Email is a standard method for sharing files between accounting firms and clients. However, it is also a vulnerable and insecure way of transmitting sensitive information. Email accounts are often targeted by cybercriminals who use phishing attacks to access sensitive information, such as login credentials and financial data. Furthermore, email attachments can contain malware or ransomware that can infect systems and steal data.

To mitigate the risks associated with sharing sensitive information over email, accounting firms should adopt certain email practices, such as encryption and two-factor authentication, to protect emails and attachments from unauthorized access. They should also educate their employees on the importance of using strong passwords, avoiding clicking suspicious links or downloading attachments from unknown senders, and reporting suspicious emails to their IT departments.

Cloud-based File Sharing

Cloud-based file sharing services have become a popular and convenient way for accounting firms to share files with their clients securely. These services allow users to store, access, and share files from anywhere while providing additional security features to protect sensitive information. Cloud-based file sharing solutions contain a variety of security capabilities and features. These include encryption, two-factor authentication, granular permissions, and audit trails, which can help accounting firms monitor who has access to their clients’ files and ensure they are not being misused.

However, accounting firms must also know the potential risks of cloud-based file sharing services. If not configured properly, these services can leave sensitive information vulnerable to anyone with an internet connection, leading to cyberattacks and data breaches. Additionally, not all cloud-based file sharing services are created equal, and some may not meet accounting firms’ specific security and compliance requirements, particularly those operating in regulated industries like healthcare and financial services.

Client Portals

One of the main benefits of using a client portal is the ability to control access to sensitive information. Clients can only access files that have been shared with them, and their access can be limited to specific files or folders. This helps prevent accidental exposure of confidential information or unauthorized access by malicious actors.

Another advantage of client portals is that they provide a centralized location for sharing files. This eliminates the need for multiple file sharing methods and reduces the risk of data breaches caused by human error, such as sending files to the wrong email address or attaching the wrong file. Furthermore, client portals offer a range of features that enhance security, including multi-factor authentication, password protection, and activity tracking. These features can help prevent unauthorized access to files and alert accounting firms to potential security breaches.

It is vital to ensure that the client portal is hosted on a secure server and that data is encrypted in transit and at rest. Encryption is essential to prevent unauthorized access to data, even if it is intercepted during transmission or storage. Regular security assessments and updates should also be performed to identify and address vulnerabilities.

Virtual Data Rooms

Virtual data rooms (VDRs) are another option for secure file sharing in accounting firms. A VDR is a secure online platform allowing users to store and share documents. It offers a higher level of security than other file sharing methods, as the data is encrypted and protected by several security measures.

In addition to encryption, VDRs also offer access controls and permissions, allowing firms to limit access to certain documents or folders to specific users. This ensures that confidential documents are only accessible to authorized personnel.

One of the benefits of using a VDR is that it provides an audit trail of all actions taken on a document. This means that firms can track who accessed a record, when it was accessed, and what changes were made. This is important for maintaining accountability and ensuring compliance with regulations. VDRs are especially useful for accounting firms with sensitive financial information, as they provide high security and control over shared documents. However, they may be more expensive than other file sharing methods and require more technical expertise to set up and manage.

Accounting Firms Protect Sensitive Client Information With Kiteworks Secure File Sharing

The Kiteworks Private Content Network is a secure and scalable platform that enables accounting firms to share client information securely and in compliance with data privacy requirements and standards. Whether sharing information via file sharing, email, managed file transfer (MFT), or other third-party communications channel, Kiteworks enables users to securely send, receive, track, and protect sensitive files from any device or location.

By leveraging Kiteworks’ secure file sharing capabilities, organizations can collaborate on files, share documents, and transfer data with colleagues and partners while maintaining complete control over the security of their projects.

Kiteworks offers an advanced security solution for file sharing through its hardened virtual appliance and double encryption protocol. This protocol ensures that sensitive files are encrypted twice, first on the end-user’s device and then on the Kiteworks appliance. The hardened appliance is subject to regular audits and testing to ensure the encryption process is reliable and secure. Additionally, the Kiteworks Security Fabric provides distributed network authentication mechanisms and services to verify user identities, devices, and data transactions. This combination of double encryption, hardened appliance, and Security Fabric provides comprehensive protection to ensure that all data shared through Kiteworks remains secure and private.

Finally, Kiteworks helps comply with several regulatory requirements standards, like the International Organization of Standardization (ISO) 27000 standards, the General Data Protection Regulation (GDPR), the Cybersecurity Maturity Model Certification (CMMC), the Health Insurance Portability and Accountability Act (HIPAA), and many more, making it a secure solution for organizations that need to meet stringent compliance requirements. The platform’s security features include protection against malware, man-in-the-middle attacks, phishing, and ransomware, ensuring that data is never compromised.

Organizations interested in seeing the Kiteworks Private Content Network in action can schedule a custom demo.


Additional Resources

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