New Accounting Reform Laws Push for Technology-Based Document Retention Practices

The Sarbanes-Oxley Act of 2002, which President Bush signed into law last year, represents an ambitious effort by Congress to address many data retention and preservation issues arising from the Enron and Arthur Andersen debacles. In addition to creating a new and apparently powerful Public Company Accounting Oversight Board (“Oversight Board”) and addressing corporate responsibility issues, the new law also mandates retention of electronic documents, imposes strict criminal penalties for altering or destroying records, including those kept in electronic form, and mandates production of electronic records and other documents when summoned by the new Oversight Board.