In our digital era, data privacy concerns have become an increasingly pressing issue for both your firm and your clients. Many countries and even some U.S. states have enacted consumer privacy protection laws, and it can be challenging to navigate through the vast amount of information available on data privacy.
Appointing a Data Privacy Officer (DPO) can help your firm protect sensitive data and ensure compliance with evolving regulations.
What is a Data Privacy Officer?
A DPO is responsible for ensuring that an organization's data is secure and compliant with all applicable regulations. They must be knowledgeable about current laws and best practices and have experience developing policies to protect customer data.
A DPO can also monitor how sensitive information is collected, stored, used, shared and destroyed. Additionally, the DPO can help staff members understand their roles in protecting client data.
Responsibilities of a Data Privacy Officer
The roles and responsibilities of a DPO will vary depending on the size of your firm. Larger firms might have a full-time DPO role, while small firms might make it the responsibility of a partner or IT professional.
Here are some of the roles a DPO can fulfill in your firm.
Ensuring compliance with data privacy regulations
While the U.S. doesn't currently have broad consumer privacy protection legislation, laws such as Europe's General Data Protection Regulation (GDPR) and California's Consumer Privacy Act (CCPA) have set the standard for protecting personal data.
A Data Privacy Officer is responsible for ensuring the company's compliance with any federal, state, or local government regulations on data privacy. They create policies and procedures and inform employees on how these policies apply to their job responsibilities.
For example, they can ensure your firm has a documented data privacy policy with clear guidelines for collecting, storing, securing and disposing of client data when appropriate.
Protecting client data
CPA firms collect an enormous amount of data from their clients, so data security is critical. Your Data Privacy Officer's primary responsibility is to protect the firm and its clients' sensitive data from unauthorized access and malicious attacks.
For instance, the DPO can work with your IT team to ensure:
Only employees who require access to data in the performance of their job duties have it
The firm has secure data storage transfer processes
The firm has the proper technological structure, has identified vulnerabilities and developed solutions to safeguard against such threats
Training and educating employees on data privacy
Educating employees and providing ongoing training to address what constitutes personally identifiable information (PII), company proprietary information and intellectual property is essential for creating a culture of data privacy in your firm.
Your DPO can help initiate awareness of data privacy, including training on data privacy policy, necessary procedures and the consequences of non-compliance with applicable rules and regulations. With this knowledge, employees can take an active role and become more aware of what they should and should not do with firm and client information.
Acting as a point of contact for external parties
A Data Protection Officer often serves as the point of contact for your cyber liability insurance carrier, applicable authorities and clients seeking more information on how the firm handles data.
Helping your company gain customer trust
A data breach can be detrimental to a firm's reputation and can result in the loss of client trust. A DPO assumes the essential responsibility of building customer trust and loyalty by ensuring their data remains secure.
Appointing a Data Privacy Officer is crucial to ensuring your firm complies with evolving data privacy regulations and best practices. The responsibilities of this role may vary depending on the size of your firm, but its importance remains the same. The DPO safeguards the firm's reputation while building trust with clients by helping create effective data privacy policies and educating employees about the importance of data privacy.
Do you want to hone your leadership skills beyond technology?
The Boomer CIO Circle is a peer group for Chief Information Officers in the accounting profession. Together, they develop innovation, budgeting, finance, communication, project management, marketing, sales and human resources skills to become confident leaders in their firms. Apply now to start building valuable long-term relationships with other forward-thinking CIOs.
Erin Shively, IT Coordinator at Boomer Consulting, Inc., is excited to grow the company’s existing tech stack with new and emerging technologies. Her role includes troubleshooting technology issues, tracking and creating internal processes, and handling on-site tech set up for events at the Accounting Innovation Center.