Accounting data is a body of financial documentation that backs an accounting statement. People use such data to prepare financial statements and declarations, and auditors can review it to confirm the accuracy of a statement. People with disputes about their accounts with a bank or company can also ask to see accounting information to determine how the company arrived at a given conclusion or balance. This information is subject to subpoena in cases where people suspect legal wrongdoing is responsible for accounting problems.
Some companies maintain electronic accounting data. Personnel in the accounting department enter financial activities in an electronic system and the system may also encounter automatic activity. For example, when someone swipes a debit card at the grocery store, the signal will travel to the bank's accounting system and an automatic adjustment will occur to reflect the purchase. Hard copies to back up the electronic documentation may be available.
Other accounting data is available in paper format. This can include things like personal checkbooks, receipts, and so forth. Companies with paper records store them in a secure location to prevent losses and may make copies for reference and convenience to make sure they will have access to the information when they need it. Sometimes, steps may be taken to digitize this data to make it more convenient and easy to access, and some old records may be stored on microfilm or in other archival formats because the original documentation is no longer available.
The law requires people to keep accounting data for a set period of time, such as seven years. After this period, people may choose to shred or otherwise destroy old financial records, although many companies choose to keep it, as it may be valuable in the future for investigations, comparison reporting, and other activities. People like tax auditors and regulators can ask for full accounting information if they have concerns about financial statements and want to verify the information for themselves.
When reviewing accounting data, people pay close attention to apparent disparities or confusing entries. This can include evidence of missing information, documentation on paper that does not match statements made, and other signs of wrongdoing or mistakes. When someone must review large volumes of accounting information, a team of people may be involved, to go through the material, as well as double checking the work of others to make sure nothing escapes their auditing activities.
Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.