The importance of having strong document records to avoid reputational risk
A recent survey by EisnerAmper, an accounting and tax service company, found that besides financial risk, reputational risk is most concerning to corporate directors, followed by regulatory and IT risk.
The fear of reputational risk is likely a result of many news stories – such as the BP oil spill – about companies that have been scarred long after a damaging incident occurred. In particular, the 2001 Enron scandal proved the value of keeping accurate records. While the company eventually collapsed because of misleading data and hiding records from the public, even unintentionally hidden or misplaced data can hurt a company’s reputation and security. A weak digital document management system can reflect, either incorrectly or correctly, the way a company typically does business.
With the implementation of the Sarbanes-Oxley Act by the U.S. Securities and Exchange Commission in 2002, keeping up with financial records became a legal issue. The act states not necessarily how companies must keep their financial records, but instead, which files should be kept and for how long. The act suggests that records should be maintained similarly to how public accountants manage their records.
The value of document scanning services
An article by CFO.com stated that “a company is only as good as the proprietary information it owns, and that information is only as secure as the records-management solution that an organization has deployed.”
Companies can also use document scanning services and data entry services to ensure the fastest and most efficient way to secure documents. Gregg Bieri, the author of the article, points out that information contained on paper, as opposed to digital platforms, is in much more jeopardy of being lost, misplaced, or damaged. By using a digital document management system, Bieri explained, data is more strongly secured and organized.