Accounting Best Practices, Fifth Edition

10–3. Add Digital Signatures to Electronic Documents

One of the primary difficulties with converting paper-based forms to electronic ones is that many documents require a signature to be affixed to them. This results in an electronic form being printed out, signed, and then either scanned back into a digital format or else used from that point forward as a paper document. As a result, the multitude of benefits associated with digital documents—minimal storage costs, infinite replication, ease of search, and so on—are lost. This problem has been corrected through the passage of a federal law in June 2000 legalizing the use of digital signatures.

It is still unclear how the courts will rule on the multitude of variations that can arise in relation to the type of digital signature used. At this time, it is quite possible that a character-based name on a message will be sufficient, though encrypted digital signatures that are much more difficult to duplicate will likely become the norm.

As more companies take advantage of this new law, we will see efficiency improvements in all of the following areas:

• Customer orders. A customer order typically requires a signature by a corporate manager, which is then hand-carried, mailed, or faxed to the receiving company. Digital signatures can cut much of the delivery time out of this process by sending orders by e-mail straight to the recipient, which will greatly speed up the order fulfillment process. In addition, it reduces the risk that an ...