From CBIA News, September/October 2002

Federal corporate reform law has document handling provisions

New federal corporate accountability legislation, the Sarbanes-Oxley Act of 2002, includes several provisions concerning the retention or destruction of business documents, according to James Bergenn, an attorney with Shipman & Goodwin. 

• The law increases to 20 years the prison time for anyone who knowingly alters, conceals, destroys or mutilates any record or document, with an intent to impede, during a federal investigation or bankruptcy investigation.

• Accountants must retain for five years all audit and review work papers.

• Within six months of the act’s passage (July 30, 2002), the Securities & Exchange Commission must draft rules regarding the retention of records. Anyone who knowingly violates those rules will be subject to fines and up to 10 years’ imprisonment. 
  

Businesses creating or updating a document retention plan should make it a point to ask their legal advisers about how this new law might affect them. 

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