Compliance glossary
Definition

Multi-Factor Authentication (MFA)

A login mechanism that requires two or more independent factors, such as a password plus a code from an authenticator app or hardware key.

What it means.

Multi-factor authentication (MFA) requires two or more independent verification factors to log in: something you know (password), something you have (phone or hardware key), or something you are (biometric). The FTC Safeguards Rule requires MFA for any individual accessing customer information (16 CFR 314.4(c)(5)). Acceptable forms include authenticator apps (TOTP), push notifications, and hardware security keys (FIDO2). SMS-based MFA is allowed but discouraged because of SIM swap risk.

Why it matters for CPA firms.

MFA blocks roughly 99 percent of automated account takeover attempts. It is the single most effective control your firm can deploy, and it is the one the FTC and cyber insurers ask about first. Firms that lack MFA on email, tax software, or remote access are typically denied insurance coverage outright. MFA fatigue and adversary-in-the-middle attacks have made authenticator apps and hardware keys preferable to SMS or push prompts.

Relevant regulations.

  • 16 CFR 314.4(c)(5)
  • NIST SP 800-63B
  • IRS Publication 4557

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