Question

Where and how are financial records and reports kept?  Who is responsible for their storage?  Is there a length of time that records should (or are required to) be kept?

Answer 1

Where and how are financial records and reports kept?

Financial records are important for any entity to know about the financial history, practices been followed, financial health of the company. Laws respective to countries, have specified the format in which the documents are required to be prepared and maintained. These include, primary financial statements like Income Statement, Balance Sheet, Equity Statement, Cash Flow statement. Other records like Ledgers, Entries with supporting documents, Reconciliations, Bank Statements, Balance Confirmations, Tax workings, Tax submissions and acknowledgements, Regulatory submissinos and acknowledgements, Tax receipts, Cancelled cheque books (if not yet retruned to the Bank),etc.

Consolidated, these all are considered as Financial records for any entity. These are required to be retained in safe storage with restricted access. In general, as per the Law, the financial records are required to be maintained at the Registered Office of the the entity. This helps in any quick referece by employees, any statutoy or regulatory authorities.

Who is responsible for their storage?

The responsilbility lies with the Finance Controller of the entity to ensure proper storage of these financial records; Ofcourse, the individual responsibility for respective sub-segments of finance etc lies with respective costcentre managers.

Is there a length of time that records should (or are required to) be kept?

Yes; The time limits are prescribed respectively by Accounting Laws, as well as, Regulatory as well as Tax authorities. These timelimits vary from requirement by either of these authorities as well as vary from country to country. The timeline ranges from 7 years to 10 years.