Destruction could come in the form of a hacker, a virus, a disgruntled employee, a major power surge, or a small fire. E-commerce companies, especially those that are entirely Web based, are particularly vulnerable because so much value is contained in computer hard disks. Your company should make a detailed review of its systems security. A good book that shows both CPAs and companies how to perform this type of review is Electronic Commerce Assurance Services . Records in electronic form only .
Many companies keep all of their accounting records in electronic form only.
This is an unnecessary risk. When records are only in electronic form they are easily lost due to an accidental file erasure, a hard disk crash, a virus, or a change to a different type of accounting program. A company that needs an audit of three years worth of records, for instance may have accessible records for only one or two years. For the third year the company may have only tax returns or internally prepared financial statements, which cannot be supported by full accounting records, and therefore, cannot be audited. If you plan to go public, plan to be audited.