ORANGE COUNTY BUSINESS JOURNAL
CYBERSECURITY AND AI
Imagine a mid-sized, Orange County-based technology company thriving in its competitive market. Busy with success, the company neglected to prioritize cybersecurity measures. This oversight proved costly when sophisticated cybercriminals hacked into their systems, holding critical accounting data and backup records for ransom. Business operations ground to a halt, and the company faced a chaotic blend of financial, operational and reputational challenges.
For business owners, the nightmare of a data breach is real and costly, with average losses reaching $1.3 million in 2023, according to IBM’s Cost of a Data Breach Report. These costs are attributable to business disruptions, revenue loss because of system downtime, the expense of losing and acquiring customers and the impact of the breach on reputation and trust. This doesn’t include additional costs related to paying ransom or potential legal fees and fines.
Accounting professionals play a crucial role in quantifying and responding to the financial impact of cyber breaches using forensic accounting to trace losses and strategize effective recoveries. Their involvement is key.
Here are the ways accounting experts are utilized to help businesses recover from a cyberattack:
• Insurance Claims: With a deep understanding of insurance policies and the specifics of cyber incidents, accounting professionals can spearhead the complex claims process. They ensure all losses are accurately documented and that claims are submitted in compliance with policy requirements, maximizing reimbursement potential.
• Forensic Accounting and Fraud Investigation: Forensic accountants are instrumental in uncovering and investigating any fraudulent activities and transactions. This is critical evidence for legal action or insurance claims.
• Restoring Financial Processes and Controls: Accounting professionals assist in re-establishing secure payment processes, restoring financial data integrity and re- designing internal controls to help avoid future threats.
• Financial Planning and Risk Management: Accounting professionals advise on resource allocation to bolster cybersecurity measures, adjust financial forecasts to consider a cyberattack’s long-term impact and integrate cyber risk management into larger organizational strategies.
• Compliance and Reporting Requirements: Following a cyberattack, accounting ex- perts ensure compliance with relevant regulations and reporting requirements, mitigating legal and regulatory risks.
• Creating a Resilient Outlook: Accounting professionals perform post-incident reviews to uncover valuable lessons, offer guidance on enhancing cyber insurance coverage and contribute to the creation of comprehensive business continuity and disaster recovery plans.
The financial aftermath of a cyberattack can be as devastating as the attack itself. Accounting professionals are vital in helping businesses recover from cyberattacks, ensuring financial stability and safeguarding against future threats.
Marc Blythe, CPA, CGMA, Founder & President
Marc brings over 30 years of expertise in accounting and financial reporting for various companies. Before starting Blythe Global Advisors, he was an Assurance/Audit Partner at Ernst & Young.
Matthew Snow, CPA
Matthew is a seasoned executive in accounting, auditing and finance, helping firms with accounting issues, financial reporting and internal controls. He previously served as an Assurance/Audit Partner at Ernst & Young.
About Blythe Global Advisors
BGA is a finance and accounting consultancy with 15 years of experience in enhancing client revenue, reducing costs, and increasing profitability through expert advisory services.
