Do business files need to be kept longer than eight years?
By Jim Innes | July 21, 2009
How do I provide files to an auditor on equipment dating back to 1998 and some 1995? We are a small construction company being audited for PST. The auditor has requested files (equipment) dating back to 2005. My problem is, in January 2005 we began using QuickBooks and added our already-owned equipment at the beginning of that year.
Most of the equipment recorded that year was purchased in 1998 or 1995. Eighty per cent of this equipment no longer exists. We still own and use a Kubota, a skid steer, and scissor lift that are recorded in 2005 but we only keep files dating back eight years now. I'm so confused about this. What can I do. We are located in Ontario.
Jim Innes answered:
Generally PST auditors do not go back beyond seven years, so purchases in 1998 and 1995 would not be relevant. It appears that the auditor thinks that the additions to QuickBooks in 2005 were in fact purchases.
The business owner should provide the auditor with their old accounting records showing the original additions to the books.
A business should never throw away the central accounting records, including the general ledgers, journals and sub-ledgers.