Cyber crime is fast becoming a threat for governments, businesses and individuals.

In 2014, a study by McAfee revealed that cyber crime’s cost to the global economy exceeded $445 billion. As an ever increasing amount of what we do and how we transact takes place online, on mobile and with contactless technology, there have been a number of high profile hacks and phishing scandals. Some of the more well-known cases have included Sony Pictures and Target, with the former suffering a malware attack which led to the leaking of confidential information of employees, and the latter resulting in a leak of the debt and credit card details of 40 million customers. This is creating both opportunities and threats for accountants. As trusted business advisers, accountants have a duty of care to safeguard the data of clients. Additionally, this also results in a potential new revenue stream of educating clients about best practice with regards to mitigating attacks.

What is cyber crime?

Cyber crime comprises of criminal acts associated with computers and networks. In recent years their frequency has increased due to the mass adoption of the internet and a shift towards a digital economy, whereby nearly everything that we do as both citizens and businesses takes place and is stored online in the cloud.

The motivation of hackers is to extract data, money or to intentionally harm or damage the reputation of the individual or organisation that has had their data compromised or security breached.

Instances of cyber crime include phishing (duping the user into revealing confidential information such as personal details and passwords), denial of service attack (an attempt to make a machine, network or website unavailable to users) and malware (a virus which results in  computers being taken over by malicious software).

Why should accountants be concerned about cyber crime?

Whilst the majority of accountants are unlikely to ever be IT savvy enough to fully understand the intricacies of how cyber attacks work, and be one step ahead of the hackers, they do have a duty of care to safeguard the digital assets and intellectual property of their own, as well as clients data.

Failure to do this could result in reputational damage to the accountant and/or accounting firm, as well as potentially becoming implicated in such crimes.

Additionally, education, awareness and best practice around cyber security reflects a new revenue stream for accountants. This opportunity has not gone unnoticed by the Big Four. In January PwC acquired Praxism, an Edinburgh based consultancy which specialises in preventing cyber attacks by helping to effectively manage user identities.

As well as advising on best practice, accountants have an opportunity to help businesses define a risk management strategy, advise on the latest developments of governments and regulators for countering and dealing with cyber security breaches and to help define estimates of the financial impact that cyber crime will have.

Surprisingly, many accountants are not even taking the most basic precautions to prevent against attacks. Recent research from cloud accountancy software company Xero revealed that only 1.4% of their accounting partners enabled two step authentication for logging into their software.

This is a relatively mainstream concept, adding an additional layer of security, whereby users have to sign in with an additional piece of information, other than their standard username and password. This data is unique in that it tends to be generated on demand to the user’s mobile phone.

Best practice

Other than turning on two step authentication, it is possible for accountants to mitigate the risk of being victims of cyber crime by taking the following actions and precautions:

Different passwords – Assign different passwords to different pieces of software. This will limit the amount of accounts cyber criminals will be able to have access to. If all of your accounts have different passwords, and one of  them has its security breached, this will limit the amount of data cyber criminals will have access to. In particular, make sure that the sign in details for your email addresses are unique. Email addresses serve as being your online passport, and if your account is taken over thieves could have access to your entire online life.

Change passwords regularly – This will reduce the chance of hackers having access to accounts due to the likelihood of them having credentials which are out of date. Additionally, if you are the victim of a phishing attack you should change all of your passwords immediately.

Use anti-virus software – It is a hassle but regularly running and updating anti virus software remains one of the best preventative measures. Setting aside a few minutes each week to do this will significantly reduce the risk and damage associated with viruses.

Data encryption – If working with sensitive information, efforts should be made to encrypt data. There are a number of free and easy to use encryption software products on the market including BitLocker for Windows and FileVault for Apple devices. Additionally, self-encrypting hard drives may be considered as a necessary precaution for data back-ups.

Be cynical – Question anything which looks unusual or suspicious. For example, be wary of clicking on links in emails requesting credentials, or responding to unusual email addresses requesting information. It is always safer to visit native websites in your browser and to call individuals on the phone to confirm their identities.

Whilst it is unlikely that accountants will ever be one step ahead of the hackers, by following these steps they can severely limit the chances of themselves or their clients being victims of cyber attacks.

With a team that cost just a quarter of other major football teams, Leicester City FC winning the Premier League for the first time in its 132-year history is a phenomenal achievement.

Besides the feel-good feeling of winning, the financial benefits of coming out on top are important: both for Leicester City FC and for the city of Leicester itself.

Leicester City FC’s win is a heroic feat, which (nearly) no one would have predicted at the beginning of the season. The bookies certainly have been caught off guard – as the very low odds show.

Despite the big figure of 5000-1 odds, David Peel, professor of economics at Lancaster University Management School explains that the ‘real life’ odds were even slimmer.

“Although the odds were 5000-1 of Leicester City winning the Premiership, the true odds were much longer,” he says. “Bookmakers give odds on long shots that have very low expected return relative to favourites.”

Due credit certainly must go to the players of Leicester City FC as well as to their coach, Claudio Ranieri, who guided the team to the top.

Bottom-line impact

Looking at Leicester City FC from the business standpoint, the club is certain to benefit from the team’s win, and Thai owner Vichai Srivaddhanaprabha is without doubt a happy man.

Let’s break down the numbers.

For winning the league, Leicester City FC will receive around £93m – some £23m more than last year.

The club’s accountants can also add an additional £29m for playing in the Championship League, bringing the additional income to around £122m. In fees alone, this is an increase of 74 per cent in year-on-year income – enough to keep any bookkeeper more than happy.

As a grand total, thanks to its higher finishing position and being selected for more live matches broadcast on TV, Leicester City FC’s revenues are estimated to top £155m, according to Deloitte’s sports business group. The club is also likely to see an increase in match day and commercial revenue (such as merchandise).

Next year, this could increase by a further £50m or more, depending on its performance in the Premier League next year and how it progresses in the UEFA Champions League (i.e. through prize money payments and other parts of the market pool distribution), Deloitte predicts.

That’s not to say that its costs will not increase, too.

Of course, Leicester City FC will have to pay more money to retain star players. As a general rule, next year, across the Premier League, you can also expect greater expenditure on new players by the ‘big clubs’ – they will do their best to protect their income base from the unexpected result and the likely competition for the top four slots.

City of Leicester

The city of Leicester will also benefit thanks to increased tourism and new business starts.

Business growth could increase by almost double the national average, according to research by data platform Company Check and Sheffield Hallam University’s Sports Industry Research Centre.

We’ve seen this before: Bournemouth experienced a revival after its football club was promoted from League Two to the Premier League between 2010-15. The total number of businesses in the town grew by 15 per cent in 2011 after the first promotion, compared with 9 per cent for the UK as a whole. For the two years after that, business count was up 11 per cent and 10 per cent respectively, versus a national average of 6 per cent a year.

This isn’t an isolated case. Swansea, too, saw a boost to its local economy – to the tune of £58m – after its football team was promoted to the Premier League in 2011.

Leicester City FC’s achievement of winning the Premier League out of nowhere is, however, without precedent.

This makes it difficult to quantify how much England’s 11th biggest city will benefit. Tom Copson, associate director in the Leicester office of Grant Thornton, estimates this will be around £49m. This includes the benefit from having Champions League games at the King Power Stadium as well as estimates of the financial impact of the intangible benefits to Leicester.

Professor Simon Shibli, head of Sheffield Hallam University’s Sports Industry Research Centre, warns that while sporting success is often a catalyst for growth, there are no guarantees.

“The economic impact of football is an interesting one,” he explains. “On one hand, it’s only 19 home games in a season and the economic impact of visiting fans tends to be cancelled out on away matches.

“Most of the global television coverage is about the sport, not the city, but nonetheless there is huge value in the ‘place marketing’ effect resulting from the English Premier League being televised in around 200 countries.”