Why Accounting Firms Are Moving to Cloud Hosting and Managed IT as Cyberattacks Climb
Attacks on accounting firms have jumped 300% since 2020, according to Accounting Today. The average breach in financial services now costs $6.08 million, per IBM’s 2024 report. Small firms aren’t flying under the radar. They’re the target.
That’s why more firms are moving to managed service providers (MSPs) and private cloud hosting. Handling this in-house no longer works, and the stakes are too high to learn on the job.
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Why Accounting Firms Are Prime Targets
Tax and accounting firms hold the data attackers want most. Social Security numbers. Bank accounts. Full tax returns. EINs. Home addresses. A single compromised firm exposes hundreds or thousands of clients in one breach.
Attackers know defenses drop during filing season. They know most firms run on a few laptops, maybe a local server, and an antivirus license from years ago. It’s an easy target with premium data.
What Cloud Hosting and MSPs Actually Solve
24/7 monitoring. Attacks don’t wait for business hours. Neither does a proper MSP. Threats get detected and contained while the firm sleeps.
Offline backups. Ransomware encrypts everything connected to the network, including cloud sync drives. Real backups are immutable, air-gapped, and tested regularly. When a firm gets hit, recovery is measured in hours, not weeks.
MFA, encryption, and endpoint protection baked in. These aren’t add-ons. A good provider configures multi-factor authentication across every tool, encrypts data at rest and in transit, and runs managed endpoint detection on every device.
One vendor, not five. Piecing together a firewall from one company, backups from another, and tax software support from a third creates gaps. A single MSP owns the whole stack.
The Compliance Angle
IRS Publication 4557 requires every PTIN holder to maintain a Written Information Security Plan. The FTC Safeguards Rule classifies tax preparers as financial institutions. Fines start at $50,000 per violation. Personal liability under GLBA can reach $10,000 per violation. That’s the firm owner, not the firm.
Cloud hosting and managed IT aren’t just security investments. They’re the documentation layer that proves compliance when an auditor or insurer asks.
The Bottom Line
DIY IT made sense when the biggest risk was a failed hard drive. In 2026, the biggest risk is a threat actor with your client list. MSPs and private cloud hosting exist because the math changed.
Firms that make the move get something they can’t build alone: 24/7 defense, immutable backups, enforced compliance, and a single team accountable when something breaks.
For tax and accounting firms evaluating their options, private cloud hosting and managed IT built specifically for the accountants solves both the security problem and the compliance problem at once.
Jatin Narang is Co-founder and CEO of Verit, a cloud hosting and managed IT provider for tax and accounting firms. He’s a Forbes Technology Council member and co-author of Beyond Best Practices: Modernizing the Successful Accounting Firm.
