DORA and Irish Accountancy Firms: Are You a Regulated ICT Provider Without Knowing It?

Did you know that your accountancy firm, providing essential services to financial clients, could soon be regulated under the Digital Operational Resilience Act (DORA) as a critical ICT third-party provider? This new EU regulation, effective from January 2025, extends its reach far beyond traditional financial institutions, pulling in many unsuspecting service providers. The implications for Irish SMEs, particularly those in the professional services sector in places like Donegal and Sligo, are profound and often overlooked. You thought you were an accountant. DORA thinks you are an ICT provider.

The Unseen Hand of DORA: Problem for Accountancy Firms

Many Irish accountancy firms, particularly those serving clients in the financial sector, have embraced digital transformation. Cloud accounting platforms, automated payroll processing, and sophisticated financial data management systems are now standard. While these innovations boost efficiency, they also create a complex web of interconnected digital services. Under DORA, if your firm provides these ICT-related services to a financial entity, you might find yourself directly in the regulatory spotlight. The Central Bank of Ireland, as the competent authority, will oversee not just financial firms, but also their critical ICT third-party providers.

This classification isn't just a label; it brings with it a host of new obligations. Firms that previously focused solely on financial compliance now face stringent requirements for ICT risk management, incident reporting, digital operational resilience testing, and third-party risk management. The challenge lies in recognizing this shift and understanding the depth of the new responsibilities before the regulation fully applies. Many accountancy firms, especially smaller and medium-sized enterprises (SMEs), may not even be aware that their services fall under DORA's broad definition of ICT third-party services, leading to a significant compliance gap. This oversight can expose them to unforeseen risks and regulatory scrutiny.

The Ripple Effect: Consequences of Overlooking DORA

Ignoring DORA's implications could have significant consequences for Irish accountancy firms. Non-compliance can lead to substantial fines and reputational damage, impacting client trust and future business opportunities. More critically, a lack of digital operational resilience in a critical ICT third-party provider can directly disrupt the financial entities they serve, leading to systemic risks across the financial sector. This is not merely a theoretical risk; the interconnectedness of modern financial systems means a failure in one part of the chain can have cascading effects.

Consider a Donegal-based accountancy firm providing payroll services to several credit unions. If their cloud payroll system suffers a major cyberattack or outage, it directly impacts the credit unions' ability to operate, process transactions, and serve their members. DORA aims to prevent such ripple effects by ensuring that all critical links in the financial supply chain are robust and resilient. The regulation demands a proactive approach to identifying and mitigating ICT risks, not just for financial firms, but for their key suppliers too. This means that the operational resilience of your accountancy firm becomes directly tied to the financial stability of your clients, elevating the importance of your cybersecurity posture. For more on managing cyber risks, see our article on what keeps you up at night.

Navigating the New Landscape: Solutions for Compliance

The first step for any Irish accountancy firm is to assess its exposure to DORA. This involves a thorough review of services provided to financial sector clients and an understanding of whether these services classify the firm as a critical ICT third-party provider. Engaging with cybersecurity experts who understand DORA's nuances can provide clarity and a roadmap for compliance. A vCISO can be invaluable in this initial assessment and ongoing compliance efforts.

Implementing a robust ICT risk management framework is paramount. This includes establishing clear policies for information security, business continuity, and disaster recovery. Regular testing of digital operational resilience, such as penetration testing and vulnerability assessments, will become a standard requirement. Firms must also ensure their contracts with financial clients clearly define responsibilities related to ICT risk and incident management. This contractual clarity is crucial for managing expectations and liabilities. Furthermore, understanding the specific requirements of NIS2 compliance can provide a strong foundation, as there are significant overlaps in the principles of digital operational resilience. You can learn more about some of these technical terms in our glossary.

---

Not sure where your business stands on cyber risk? Download the Irish SME Cyber Survival Guide — a free, plain-English guide to the 10 controls every Irish business needs. No jargon, no sales pitch.

---

Building Resilience: Actionable Steps for Accountancy Firms

Accountancy firms in Sligo and across Ireland should begin by identifying all financial sector clients and the specific ICT services provided to them. This inventory will help determine the scope of DORA's applicability. Next, conduct a gap analysis against DORA's requirements, focusing on ICT risk management, incident reporting, and digital operational resilience testing. This will highlight areas where current practices fall short and require immediate attention. This proactive approach is like checking the foundations of a building before a storm hits; it ensures stability when it matters most.

Invest in training for staff to raise awareness of DORA and its implications. Develop and regularly test incident response plans to ensure a swift and effective reaction to any cyber incidents. Finally, engage in ongoing dialogue with financial clients to align on expectations and responsibilities under DORA, fostering a collaborative approach to digital operational resilience. For further guidance, refer to the Central Bank of Ireland's information on DORA. Regularly review your cybersecurity insurance to ensure it covers DORA-related risks; our article on cyber insurance for Irish SMEs can provide further insights. Staying informed and proactive is your best defense. For more articles on cybersecurity for Irish SMEs, visit our blog.

Related Reading

• NIS2 Fines and Penalties: The Numbers That Should Keep Every Irish Director Awake.
• The 12-Month Cyber Governance Roadmap for a Donegal SME: From Zero to NIS2-Ready.
• Director Liability in the Age of NIS2 and GDPR: A Briefing for Irish Company Directors.

Ready to find out exactly where your business stands? Book a free 20-minute strategy call with our vCISO team at pragmaticsecurity.ie/book-a-call. No sales pitch. No jargon. Just clarity on your cyber risk — and a clear plan to address it.