CM Autumn Template - Institute of Chartered Accountants of Ontario

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addition, it is important to note that backups are critical,
and may involve additional costs.
Summarized below are guidelines to consider in
determining how long to retain documents. When in doubt,
you should seek legal advice.
• CSQC 1 states that “in the specific case of audit
engagements, the retention period would ordinarily be
no shorter than five years from the date of the auditor's
report, or, if later, the date of the group auditor's report.”
• The Council Interpretation for Rule of Professional
Conduct 218, Retention of documentation and working
papers, states: “a member should retain documents
for a period of time to properly service clients. A
general guideline would be a period of 10 years,
during which all records are maintained, and a longer
period of time, perhaps indefinitely, or the actual time
period where required by statute …"
• According to the Canada Revenue Agency, you must
keep all of the records and supporting documents that
are required to determine your tax obligations and
entitlements for a period of six years from the end of
the last tax year to which they relate. CRA further
emphasizes that you are responsible for maintaining
appropriate hardware and compatible versions of
software in order to access electronic documents for
at least the last six years. For more information, refer to
the Articles section in the Practice Matters area under
the CA Firms tab of the Institute’s website.
How to Implement a Paperless Office: Structure
It is critical to create an appropriate structure when
designing how information is going to be stored,
maintained, accessed and purged. There are two options
for this. The first option is for a firm to design its own
paperless office system. The second option is to purchase
software solutions that provide a standardized paperless
office system. A firm will need to decide if it has the
expertise to customize its own paperless office system or if
it needs to purchase software. In general, manufactured
software provides better comfort, as it is a tested product.
The structure of a paperless office system is extremely
important as it dictates how files are labeled and retrieved.
Files can be managed in a directory format, indexing
format, container format, or some combination of the three,
as described below. A firm will need to decide which file
management system is appropriate for its purposes.
Directory formats: A directory system places all tax returns
in one folder, all working paper documents in another
folder, and all permanent files in a different folder. This
segregation by type of work is one method of organizing
the information on hand.
Indexing format: The indexing format structures linkages
between documents, enabling an easy wild card search
function. This is commonly provided for by CCH, Doc-it
and other paperless software solutions. Locations can be
32 CheckMark • Autumn 2009
different, but related documents are linked together. This
can create easy manoeuvering between different
documents no matter where they are stored, resulting in
documents being easily accessible. Most document
management solutions use an index format.
Container format: An example of a container format is
Caseware, where documents are stored by directory. For
example, documents will be stored in containers that are
organized by client and year. Therefore, documents are
accessible by having knowledge of the year and the client
and the ability to locate the container. This tends to be easier
for smaller firms, as a client’s tax return, Caseware file and all
other documents associated with the particular client can be
quickly accessed. In addition, far less training is needed. The
only required additional step is to establish a consistent file
labeling system for each electronic document created. A
common strategy is to include client – date – description.
Changes to your existing system
To go paperless, the most basic concept to understand is
what you want to change from your existing filing system.
The changes are as follows:
1. Paper file folders will convert into document manager
files, such as a Caseware file. This file replicates the
function of a paper file folder; however, it is far more
sophisticated. There may be training required in order
to fully understand the sophistication of an electronic
file folder. It is critical that these electronic file folders
are able to compress, as this is a key factor in
managing hard disk space, and reducing unnecessary
upgrades in hardware.
2. Photocopies, printed e-mails, faxes, and other similar
items will convert from paper into a PDF document,
which is done using Adobe Acrobat software. It is
critical to use this type of document, as it is a more
effective utilization of hard disk space.
3. It is advised to keep all signed documents in a
permanent paper folder; however, at the same time, it
is also recommended to scan them in so that it
becomes possible to quickly review that all documents
are signed through the electronic version. Whether
signed documents are acceptable in a scanned format
depends on the type of document. The basic rule of
thumb is that if the signed document would be
acceptable through fax, then it is acceptable as a
scanned image.
Hardware considerations for housing a paperless office
The following decisions regarding hardware will need to be
made:
Monitors: A firm will have to decide on how many
monitors/screens they will need. Most paperless systems
involve using at least two monitors. Many efficiencies are
created from being able to cross-reference information