Accounting rules: you must keep e-mails
John Iosub
Published: 21 Mar 2003 11:45 GMT
Arthur Andersen's document-shredding trouble has made many companies aware of the importance of a sound document retention and destruction policy that includes both paper-based and electronic documents. Recently, the Securities and Exchange Commission fined six securities firms a total of $10 million for failing to produce e-mails requested in the course of an investigation.
The retention period must be reasonable and clearly set in the policy. A good retention policy cannot be selective -- all documents should be saved. The policy must be well known and understood by the employees and applied evenly across the company. Also, the storage type may vary as long as one can produce the evidence. For instance, courts may accept e-mail hardcopies as evidence, but such documents may lack necessary additional information, such as Internet header and routing information. Ideally, e-mail messages must be archived in their original form, which may reduce the potential liability for e-mail communication.
However, there are many problems with managing e-mail archives. E-mail consumes a great deal of digital storage. E-mail communication is expected to increase not only in number of messages, but also in size per message due to attachments. Companies must acknowledge the importance of e-mail retention -- and the role that storage plays. In 2002, there were 24 billion e-mails sent per day in the world, with 40 percent attributed to North Americans. According to the IDC, it is estimated that over 36 billion messages will be sent daily in 2005. Many companies will experience e-mail storage growth of more than 50 percent in one year.
Education is critical
The effects of the Sarbanes-Oxley Act of 2002 reach further than just companies publicly listed in the US. If you do business with US public companies, you may have already been asked to become compliant. Thus, it is difficult to quantify the ripple effect of the Act on how we will do business in the years to come. Most IT managers do not really understand the importance of the new regulations, and I think that ethical discussions and education on the topic will be the key for achieving compliance.
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