Positioning Against Emerging Risks in Realtime



Over the past two years, businesses, leaders and consumers were made startlingly aware of the dangers of reactionary policies and financial planning. A global pandemic is one thing, but geopolitical upset the likes of the current Russian-Ukrainian conflict is quite another, with its own set of peripheral threats. For CPAs and firms, these threats seem poised to manifest in two forms: inflation and data security.  

According to Reuters, U.S. consumer prices hit their largest annual increase due to inflation in 40 years, led by rising costs for rent, electricity and food1. Initially spurred by the COVID-19 pandemic and its resultant, ongoing logistical challenges impacting supply chains, inflation is only likely to continue amid the Russian-Ukraine conflict, particularly where the price of food and fuel (and, therefore, energy) is concerned.

In a recent article, MICPA member John Pridnia, CPA, CGMA, Tax Director at Rehmann, suggests that planning for inflation remains critical for organizations to remain financially sound and, at the very least, sustain, if not grow2. Pridnia also emphasizes the importance of staying ahead of interest rates, monitoring cash flow and managing debt closely. He advises that taking time to review contracts, leases, etc. could present opportunities to fix costs over a longer timeline.

However, rising inflation is not the only evolving risk facing organizations amid this new turmoil. Reuters reports that as early as late January, the New York Department of Financial Services alerted financial institutions to expect retaliatory cyber-attacks in the event that Russia invades Ukraine, triggering U.S. imposed sanctions. Now that those events have come to pass, cybersecurity is an area of increased risk for organizations of all sizes.

According to Fast Company, the FBI is particularly concerned about ransomware attacks reminiscent of the Colonial Pipeline hack in 2021 which resulted in sporadic shortages at U.S. gas stations. Despite that attack having been carried out by a nongovernment group of Russian hackers, “…ransomware groups typically operate with some tacit approval from the regime of Vladmir Putin, and the Russian government may be more tolerant of hacks on major Western targets if tensions continue to ramp up4.”

That said, organizations should consider an immediate review of cybersecurity initiatives as Security Magazine reports private companies are no longer in the peripheral of such conflicts, but rather a strategic target for the infliction of economic disruption5. Not all hope is lost, however. Just as there are strategies for planning for inflation, organizations can take steps to protect themselves from cyberthreats as well.

In recent comments to Forbes, Therese Schachner, cybersecurity consultant at VPNBrains, advised, “Businesses can look out for updates about the latest threats and cyberattacks from trusted sources such as government agencies. If businesses are well-informed about the latest occurrences in the cybersecurity space, they will be better equipped to detect, prevent, and mitigate cyberattacks6.”

Her advice comes on the heels of warnings from the U.S. Cybersecurity & Infrastructure Security Agency (CISA) that every organization, large and small, should be prepared for disruptive cyber activity. Some of the ways businesses can do this, according to Schachner, is by adopting cybersecurity best practices like running frequent software updates, using multifactor authentication and performing regular data backups (encrypted, preferably)6.

Further, CISA suggests making use of the agency’s Cyber Hygiene Services, a free solution that performs vulnerability and application scanning as well as remote penetration testing. The agency also offers assistance with preparing staff to recognize common phishing attacks and raising their level of security awareness. Finally, CISA advises all businesses to expect the worse-case scenario, that any attack leveled at a given organization will be at least partially successful. “Senior management should ensure that exigent measures can be taken to protect your organization’s most critical assets in case of an intrusion, including disconnecting high-impact parts of the network if necessary6.”

The MICPA will continue to monitor these ongoing and emerging disruptors. If you would like to continue a discussion about inflation or cybersecurity threats please join other members on MICPA Connect

  1. Mutikani, Lucia. “U.S. Consumer Prices Post Largest…Reuters. 10 Feb. 2022. Accessed on 2 Mar. 2022.
  2. Pridnia, John. “Planning for Inflation.Rehmann. Feb. 2022. Accessed on 2 Mar. 2022.
  3. O’Donnel, John and Huw Jones. “European, U.S. Regulators Tell Banks to…Reuters. 9 Feb. 2022. Accessed on 2 Mar. 2022.
  4. Melendez, Steven. “What a Russian Cyberattack on the U.S. Could Look Like…Fast Company. 25 Feb. 2022. Accessed on 2 Mar. 2022.
  5. Ambwani, Kailash. “Global Hybrid Warfare Introduces Cyber Threats…Security Magazine. 17 Feb. 2022. Accessed 2 Mar. 2022.
  6. Rash, Wayne. “CISA Issues ‘Shields Up’ Warning About Russian Cyber Attacks.Forbes. 25 Feb. 2022. Accessed on 2 Mar. 2022.

Source: MICPA

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