Accounting Best Practices, Fifth Edition

10–5. Archive Computer Files

Some companies have elected to use computer records as a direct replacement for their paper documents (see the group of best practices shown later in Exhibit 10.4). When this happens, they have certainly eliminated the majority (if not all) of their filing work, but they have also put themselves at risk of losing electronic documents if they are not archiving computer records. In a typical organization, all records are purged from the computer system after one or two years, usually because maintaining a larger on-line database will require an inordinate amount of expensive storage space. However, purging these records runs counter to the document-destruction policies noted later in the section, “Adopt a Document-Destruction Policy,” in which nearly all documents must be retained for longer than one or two years. Consequently, storing all documents on a computer system is not legally possible if the system is to be systematically purged of all records from time to time.

The answer to the purging problem is to archive data before it is purged. This means that the database must be transferred to some reliable storage medium, such as back-up tape or compact disc. By doing so, one can retrieve the back-up storage medium at some later date and review it for data, extracting any electronic document needed. Though this may seem like a simple matter of inserting an extra back-up tape into the daily computer back-up procedure and then putting the extra tape in ...