Incident Response: Preparing for the Inevitable

A security leader once told me that "everyone has a bad day eventually." What he meant by that is cyber incidents are not a matter of if, but when. Whether it's a social engineering attack, data breach, ransomware, or even an insider threat, everyone gets attacked eventually. Everyone. For businesses handling sensitive financial data, having a plan in place to detect, respond to, and recover from cybersecurity incidents is absolutely critical.

For accounting professionals, tax professionals, and bookkeepers, incident response is not just a best practice—it is a regulatory requirement under the FTC Safeguards Rule. Firms must have incident detection and response procedures in place to minimize the impact of security events and protect customer information from unauthorized access.

What is an incident response plan?

An Incident Response Plan (IRP) is a structured approach that organizations follow to detect, respond to, and recover from cybersecurity incidents, minimizing damage and ensuring business continuity. Under the FTC Safeguards Rule, financial institutions and other covered businesses must implement a written incident response plan as part of their broader information security program. This plan should define roles, responsibilities, and procedures for responding to security events, including unauthorized access to customer information. It must also outline how incidents are contained, how affected individuals and regulatory authorities are notified, and how lessons learned are integrated into future security improvements.

Building an Effective Incident Response Plan

A well-structured Incident Response Plan (IRP) provides a clear, repeatable process for handling cybersecurity incidents. The National Institute of Standards and Technology (NIST) outlines a standard Incident Response Lifecycle that includes four key phases:

1. Preparation

• Establish clear policies and procedures for handling security incidents.

• Define roles and responsibilities for employees, IT staff, and external partners.

• Implement security controls such as endpoint detection, firewalls, and logging.

• Conduct regular security awareness training to reduce human errors.

  
  

2. Detection & Analysis

• Monitor systems for suspicious activity (e.g., unusual login attempts, data exfiltration).

• Use network monitoring, endpoint detection, and set up security alerts.

• Classify incidents based on severity and impact to determine response urgency.

  
  

3. Containment, Eradication & Recovery

• Isolate affected systems to prevent further spread (e.g., disconnect compromised devices).

• Remove malware, unauthorized access, or compromised accounts.

• Restore systems from secure backups and verify integrity.

• Communicate with affected stakeholders (employees, customers, regulatory bodies).

4. Post-Incident Review & Lessons Learned

• Conduct a post-incident analysis to determine the root cause.

• Update incident response procedures based on findings.

• Apply lessons learned to improve security defenses.

Testing and Improving the Incident Response Plan

An Incident Response Plan is only effective if it is tested and refined over time. Organizations should:

• Conduct Tabletop Exercises – Simulate real-world cyber incidents to evaluate response readiness

• Review After Action Reports – Analyze past incidents for weaknesses and trends.

• Update Plans Based on Organizational Changes or New Threats – Continuously adapt to emerging cybersecurity risks.

Organizations that regularly test and improve their IRP will respond more effectively when a real incident occurs.

Common Incident Response Challenges

While Incident Response planning is an absolutely critical component of a good (and compliant) security program, it is oftentimes overlooked.

What we typically see in the small and midsize business sector is:

• No formal incident response plan – Many firms rely on ad hoc responses instead of a structured plan. They are stuck figuring out what to do in the moment, which is the worst possible time to be doing it.

• Lack of trained personnel – Employees are unprepared to recognize and escalate security threats. The situation gets out of control before anyone calls for help.

• Failure to test response plans – Some organizations have plans, but they were bought and not built. These untested and oftentimes outdated plans fail under real-world conditions.

• Unclear roles and responsibilities – Confusion over who should do what delays incident resolution.

What should you do?

If you don't have security personnel on staff, you should absolutely be looking for a partner to assist with incident response. Managed service providers typically have virtual CISO (vCISO) services that help firms develop, test, and refine their incident response capabilities. They also have teams of cybersecurity experts on deck to help respond and recover from incidents when they happen. Entoo Security is no different - we offer both managed security and advisory services, along with a full-service FTC Safeguards Compliance Program that includes an incident response plan customized for your business.

Final Thoughts

An effective Incident Response Plan is a critical component of cybersecurity and a requirement under the FTC Safeguards Rule. By preparing in advance, testing response procedures, and continuously improving security measures, firms can minimize data breach risks, ensure compliance, and protect client information.

If your firm does not have a tested incident response plan, now is the time to build one. The cost of preparation is far lower than the consequences of an uncontained cybersecurity incident. To learn more about compliance with the FTC Safeguards Rule, visit: FTC Safeguards Rule: What Your Business Needs to Know.