CHAPTER 7: ACCOUNTING, RECORDS, AND ASSOCIATED REGULATIONS
The best and probably the only way for a public company to reduce the risk associated with the ordinary destruction of old and outdated corporate records is to implement a document retention/ destruction policy that forbids the ad hoc or inconsistent handling of company records. All employees should be educated about the policy. Factors a company might consider in creating such a policy include: The cost of retaining the document; The business need for the document; The age of the document; Whether the document may become relevant in the future; and The frequency and magnitude of litigation to which the document might be relevant.
GENERAL GUIDELINES ON RECORD RETENTION Records to keep permanently: Cash receipts journal
Billing and AR journal entries Billing and AR general ledger Chart of accounts AR trial balance report Sales journal
Check receipts report Cash posting report Tax returns Property basis records Tax authority adjustments/correspondence
Training manual AR policy manual
Internal control manual Financial statements Legal and tax correspondence
Records to maintain for seven years include: AR sub-ledgers Accounts receivable aging reports Customer maintenance change report AR account reconciliations Other AR sub-ledgers and reports Billing invoices Employee expense reports
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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