AICPA Privacy Checklist for CPA Firms

Select a team of individuals within the CPA firm who will be responsible for handling privacy matters. This team will play a crucial role in ensuring that privacy policies and procedures are implemented effectively and that the firm remains compliant with relevant privacy frameworks. The team should have a good understanding of data privacy principles and be familiar with the firm's operations and processes. They will be responsible for coordinating and overseeing the privacy-related tasks outlined in this checklist.

A privacy risk assessment is a systematic process for identifying and evaluating potential risks to the confidentiality, integrity, and availability of personal information held by the CPA firm. This assessment will help the firm understand the potential risks it faces and develop strategies to mitigate those risks. The assessment should consider factors such as the type and volume of personal information held, the firm's information systems and infrastructure, its data handling processes, and any legal or regulatory requirements that apply. The goal is to identify any vulnerabilities or weaknesses in the firm's privacy practices and develop a plan to address them.

A data inventory map is a visual representation of the personal information collected, processed, stored, and transmitted by the CPA firm. It helps the firm understand the flow of personal information within its systems and identify any potential points of vulnerability. The map should include details such as the types of personal information collected, the sources of that information, the purposes for which it is collected, and the locations where it is stored or transmitted. Creating a comprehensive data inventory map will improve the firm's ability to manage and protect personal information effectively.

Identify the privacy policies and procedures that are currently implemented within the CPA firm. These may include internal policies that govern the firm's handling of personal information, as well as external policies that are communicated to clients and other stakeholders. By identifying the existing policies and procedures, the firm can assess their effectiveness and determine whether any updates or modifications are required to ensure compliance with current privacy requirements and best practices.

Review the existing privacy policies to ensure they are up to date, accurate, and comply with applicable laws and regulations. Pay particular attention to areas such as the types of personal information collected, the purposes for which it is collected and used, the sharing of personal information with third parties, and the measures in place to protect personal information from unauthorized access or disclosure. Any gaps or deficiencies identified during the review should be addressed in the firm's privacy policies and procedures.

Determine the privacy frameworks that are applicable to the CPA firm and its operations. These frameworks may include legal requirements imposed by relevant jurisdictions, industry-specific standards or guidelines, or frameworks developed by professional bodies such as the AICPA. By determining the appropriate privacy frameworks, the firm can ensure that its privacy practices align with recognized standards and best practices, and that it remains compliant with applicable legal and regulatory requirements.

A Data Protection Impact Assessment (DPIA) is a process that helps organizations identify and minimize the data protection risks of a project or activity. It is particularly important when introducing new technologies or processing operations that are likely to result in high risks to the rights and freedoms of individuals. The DPIA should identify the potential risks, assess the necessity and proportionality of the processing operation, and identify measures to address the risks. By conducting a DPIA, the CPA firm can ensure that the privacy risks associated with its processing activities are properly identified and managed.

Identify and document all third-party suppliers who process personal information on behalf of the CPA firm. This may include cloud service providers, IT vendors, payroll processors, or any other third parties that have access to personal information as part of their services. By identifying and documenting the third-party suppliers, the firm can assess their privacy practices and ensure that appropriate safeguards are in place to protect personal information.

Assess the agreements in place with third-party suppliers to ensure that they include appropriate provisions for data privacy and security. The assessment should consider factors such as the purpose and scope of data processing, the security measures in place to protect personal information, the rights and responsibilities of the parties, and any requirements for data breach notification or incident response. By assessing the supplier agreements, the CPA firm can ensure that its third-party suppliers are contractually obligated to protect personal information in accordance with applicable privacy requirements.

Implement any necessary changes or updates to the CPA firm's privacy policies and procedures based on the review and assessment conducted earlier. Ensure that the updated policies and procedures reflect current best practices, address any identified gaps or deficiencies, and comply with applicable legal and regulatory requirements. By implementing necessary changes, the firm can enhance its privacy practices and ensure that personal information is adequately protected.

Provide privacy training to all employees within the CPA firm to ensure that they are aware of their responsibilities and obligations with regard to protecting personal information. The training should cover topics such as data handling practices, security measures, incident reporting procedures, and compliance with privacy policies and procedures. By providing privacy training, the firm can enhance employee awareness and understanding of privacy matters, reducing the risk of privacy breaches and non-compliance.

Update the internal and external privacy notices to reflect any changes or updates made to the CPA firm's privacy policies and procedures. Internal privacy notices should be communicated to employees and other stakeholders within the firm, while external privacy notices should be made available to clients, customers, and other individuals whose personal information is collected and processed by the firm. By updating the privacy notices, the firm can ensure that individuals are informed of the firm's privacy practices and their rights with regard to their personal information.

Implement a compliance monitoring program to ensure ongoing compliance with privacy requirements and best practices. The program should include regular monitoring and review of the firm's privacy practices, as well as mechanisms for addressing any identified non-compliance issues. By implementing a compliance monitoring program, the firm can proactively identify and address privacy risks and ensure that personal information is adequately protected.

Perform regular privacy audits to assess the CPA firm's compliance with privacy requirements and identify any gaps or deficiencies in its privacy practices. The audits should be conducted by individuals or teams independent of the areas being audited to ensure impartiality and objectivity. By performing regular privacy audits, the firm can ensure that its privacy practices remain effective and compliant with applicable privacy requirements.

Document and report any identified data breaches in accordance with the firm's data breach response plan and applicable legal and regulatory requirements. The documentation should include details such as the date and time of the breach, the nature and scope of the breach, the personal information affected, and any remedial actions taken. By documenting and reporting data breaches, the firm can ensure that appropriate measures are taken to address the breach and minimize the impact on affected individuals.

Implement corrective actions based on the findings of privacy audits and data breach incidents. The corrective actions should address any identified gaps or deficiencies in the firm's privacy practices and ensure that necessary measures are taken to prevent similar incidents in the future. By implementing corrective actions, the CPA firm can continuously improve its privacy practices and enhance its ability to protect personal information.