In 1999, the Federal Trade Commission (FTC) enacted the Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999. The GLBA was legislated to protect consumers’ private financial information and govern the collection and disclosure of clients’ financial information primarily by financial institutions and others.
The GLBA applies not only to large banks and financial institutions, but to CPAs, accountants, and tax preparers, as well, regardless of size. If a firm neglects to properly protect their clients’ data under the GLBA, they put themselves at risk. The Federal Trade Commission may penalize them, and the penalties are severe. These penalties include imprisonment for up to five years, fines, or both. An organization can be fined up to $100,000 for each violation, while officers and directors can be fined up to $10,000 for each violation.
IS YOUR FIRM COMPLIANT?
A key element of a record retention policy is determining how long records need to be maintained. This time period is largely dependent on the types of documents being held, the services offered by the firm, and any laws or regulations defining the holding period. A record retention policy should cover hard copy and digital information. For hard copy records, keeping locked storage files, secure access methods, and clear screen policies are security procedures which should be included.
When files have passed their required retention periods, procedures for secure document destruction should be clearly outlined and monitored in order to protect the firm from the risk of litigation, penalties, lost revenue, and damage to your reputation. Because some regulations can differ from state to state, CPAs should consult with their legal counsel when developing their records retention policy.
Information found in accounting records may include social security numbers, bank account numbers, and other personal information which could facilitate identity theft. Accountants and CPAs must take steps to ensure the protection of this information when disposing of files which are no longer required by the business.
WHICH SIERRA SHRED SERVICES BENEFIT ACCOUNTING PROFESSIONALS?
Sierra Shred is the best choice for your document and data destruction needs and recommends the following services to benefit accounting professionals:
• On-Going Recurring Shredding – locked container on-site for regularly scheduled service
• One-Time Purge Shredding – on an as-needed basis for small and large disposals
• Hard Drive Destruction – secure process makes data from old computers completely irrecoverable
• Media & E-Recycling – safely discard computer peripherals and electronics