CHAPTER 7: ACCOUNTING, RECORDS, AND ASSOCIATED REGULATIONS
If a system fails to operate as required in the procedure, the company may face penalties if it has not maintained its books and records in original or authorized micrographic form.
RECORD DESTRUCTION PROCESS A company must work closely with its legal department to develop a records-destruction schedule that keeps the company in compliance with local and national regulations while allowing the discarding of information that is no longer needed. Ideally, the records-management program should focus on managing the right information at the lowest cost and should be able to tell anyone what records are stored and where, and how to retrieve them. It is imperative that before documents are destroyed at least two people validate that the “right” (intended) documents are being destroyed. One person should pull the files and the other should sign off that the proper documents are being destroyed. Further, don’t trust the label on the record box— look inside to make sure the records match the label and list. To ensure compliance, the records management program should be integrated into the organization’s internal audit process. Key program components that should be audited periodically include: Destruction timeliness. This measures the time lag between when records are eligible for destruction and actual destruction. Retention schedule should comply with the latest laws and regulations. Business units must be in compliance. Program training and communications delivery. Auditing should validate that appropriate employee groups have attended training and individual employees have acknowledged the company’s record management policies.
7.9 Other Regulations
PRIVACY LAWS It is imperative that customers’ financial records be kept in a safe place where the information cannot be accessed by anyone who does not have the authority to do so and who has not signed a confidentiality contract. If this information is stolen, there could be a financial impact to the company. This sensitive data includes bank account information, credit card numbers, and tax identification numbers. No one believes fraud can happen in their organization, yet it happens every day. Protecting these records curbs the possibility of fraud.
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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