In the early 2000s, a few events in the financial realm shook the confidence of American investors. If the company names Enron, Tyco, and WorldCom ring a bell, you have probably heard of the accounting scandals associated with them. In order to ensure a debacle like this doesn’t happen again—and to build the confidence of investors—an act was passed by Congress in 2002 called the Sarbanes-Oxley Act or SOX. This act mandated strict reforms put in place to protect investors from fraudulent accounting practices and activities. SOX specifically aims to raise the bar when it comes to financial disclosures from corporations that will prevent accounting fraud.
Many things changed in regards to security and safety in investing and within other facets of the accounting world at the onset of the 21st century. There were also standards set about for digital accounting document storage, and this is where SOX and Generally Accepted Accounting Principles, or GAAP, work together to ensure compliance with accounting standards and digital document storage.
GAAP Retention Guidelines
When it comes to company auditing, SOX states that firms are required to keep every document relating to or having information about that company’s policies or performance. Thus, in the process of document storage, any relevant document containing information about a company that is represented in numbers or words must be retained for audit.
This includes the following digital documents:
- Company emails and email attachments
- Documents retained on computers, e-data, servers, websites, and auxiliary drives
Storing company documents for review is not the only part of the retention guidelines. There are digital requirements for storage of all accounting documents, whether that is client information, account passcodes, or investment strategies as part of GAAP.
The parts of the puzzle that ensure proper compliance with digital document storage and GAAP rules include the following:
- All documents, including email, must be tamper-proof.
- Encryption is paramount; all stored digital documents must have cutting-edge encryption and a digital signature.
- Digitally stored documents must be read only, be password protected, and cannot be deleted.
- A third party must be able to audit digitally stored documents and have document searchability.
So, who has to abide by GAAP and other digital storage compliance rules? Who could benefit from a simplification of compliance procedures? The list includes any and all financial sectors—from investing firms to CPAs. Those responsible for SEC record retention or CPA record retention know and understand the hassle that comes from getting and staying compliant.
GAAP Retention S$
Wouldn’t it be great to have the peace of mind that comes with knowing that the right file is only accessible to those who have authority to view it for the amount of time that they are allowed to view it, and not a minute longer? With a GAAP-compliant DMS product from eFileCabinet, you can enjoy the freedom that is found in using automated file-retention features, audit trails, and state-of-the-art security.
One of the best features found in eFileCabinet’s products is security. SecureDrawer offers a 256-bit AES data encryption web portal to send documents with complete GAAP and SOX compliance. Additionally, files are stored with ease through automatic file retention and other workflow services, such as the ability to specify which user can access what document, automatic file transfer, and more.
The use of a compliant DMS program will save you time by simplifying document searching, retention, and sharing, money, and the associated fear of impending GAAP audits.
Take a few moments to fill out the form on this page and you will have the opportunity for a free 15-minute demonstration of how eFileCabinet’s industry-compliant DMS products can erase the headache involved with staying GAAP and SOX compliant.https://content.efilecabinet.com/wp-content/uploads/2015/12/Document-Management-Security-Concerns-05.jpg