Compliance Glossary
Definition

Data Inventory

A comprehensive record of all systems, applications, and locations where your firm stores, processes, or transmits client data.

What It Means

A data inventory (also called a data map or information asset inventory) is a documented catalog of every system, application, device, and physical location where your firm stores, processes, or transmits sensitive client information. For each entry, the inventory records what type of data is stored, who has access, what security controls are in place (MFA, encryption, backups), whether a Business Associate Agreement or Data Processing Agreement exists, and the data classification level (public, internal, confidential, restricted).

Why It Matters for CPA Firms

You cannot protect data you do not know about. The FTC Safeguards Rule requires firms to know where customer information is stored and to have appropriate safeguards for each location. A data inventory is the starting point for risk assessments, policy generation, and control testing. When a breach occurs, having a current data inventory allows you to quickly determine the scope of exposed data and meet state notification deadlines.

Relevant Regulations

  • FTC Safeguards Rule (16 CFR 314.4(b)(1))
  • IRS Publication 4557

How Kompflow Helps

The Data Inventory & Classification module handles this for your firm, personalized to your software, team size, and state requirements.

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