Sarbanes-Oxley
Public Company Accounting Reform and Investors Protection Act

How to Comply
While Sarbanes-Oxley requires the development and maintenance of detailed corporate financial information, cleansing computer systems of unnecessary files is an essential task. When a plaintiff comes and says "Give me your data, you've got to give them not only paper data but all electronic data. These discovery processes can amount to huge "fishing trips.” If records are destroyed in the normal course of business, it is very difficult to prove that any one is trying to obstruct justice. Properly documented disposal of electronic records is absolutely essential in today's litigious society.

TEN TIPS FOR ELECTRONIC RECORD RETENTION
Sarbanes-Oxley reinforces the reality that electronic data management should garner top priority for corporate leadership, corporate counsel and accounting/auditing professionals. The following 10 tips should be considered when developing and maintaining rules for electronic record retention:

1. Make electronic-data management a business initiative, supported by corporate leadership.
2. Keep records of all types of hardware/software that are in use and the locations of all electronic data.
3. Create a document-review, retention and destruction policy, which includes consideration of backup and archival procedures, any online storage repositories, record custodians and a destroyed documents "log book."
4. Create an employee technology-use program, including procedures for written communication protocols, data security, employee electronic-data storage and employee termination/transfer.
5. Clearly document all company data-retention polices.
6. Document all ways in which data can be transferred to or from the company.
7. Regularly train employees on the company's data-retention policies.
8. Implement a litigation response team, comprised of outside counsel, corporate counsel, the human resources department, business line managers and IT staff that can quickly alter any document-destruction policy.
9. Be aware of electronic "footprints" — delete does not always mean delete, and metadata is a fertile source of information and evidence.
10. Cease document-destruction policies at the first notice of a suit or reasonable anticipation of suit
    

The National Law Journal
Michael C.S. Lange
1/2/03