The Cloud ate my data..

Cloud computing can work a bit like Hotel California; you can check your data in OK, but will you ever get it out?

One of the least thought about issues is exactly how does one get data out of the Cloud.
A Practice needs to consider the notion of being locked-in to certain applications or systems,
all Practices' and their clients need to consider the requirements to access data some years into the future for a range of regulatory reasons.

Backup of data may well require the applications which created the data to be available in order to sensibly access it. When was the last time you opened a MYOB-4 archive?
This may be achievable if complete system backups and there exists perpetual licences to applications which allow a user to rebuild a system so as to restore data.  But does this exist in the current Cloud Accounting world?

In a Cloud setting, rebuilding an application years later so as to make data intelligible in most cases is impossible — and yet that is precisely what organisations might have to be able to do in order to remain compliant with data retention laws and regulation. All records, whether electronic or not, should be retained for at least the minimum period stated in any applicable statute or regulation.

In Australia there are more than 80 acts of legislation, regulations and rules specifying document retention requirements applicable to companies under Australian law. Depending on the situation data needs to be accessible for five, seven or 10 years after creation.

If a court orders a company involved in litigation to make available records from six years ago, or during an ATO audit, excuses such as “the Cloud ate my data” simply won’t wash.

 

Such scenarios should be considered at the outset of any relationship, and give rise to questions such as:

• If service providers change, can the records be usefully accessed?
• Can I access archived data, years into he future without the service provider?
• Are there any lock-ins, such as licensing ( i.e. will the application even open the file if there is no current licence) which prevents access to accounting or SMSF data?
• Does the supplier limit the data that can be exported from their application, and will such limits still allow one to meet any data retention obligations?
• Can data be extracted on-demand from the Cloud?
• When will archive data be transferred and what form will it take?
• What are the obligations on each party regarding an exit plan?

SAF-T The International Audit and Archive Format
In order to address a number of the issues above, we recommend that when considering any Cloud Accounting service, that as a minimum they support the Internationally standardised OECD SAF-T data archive format.
It is preferable that the SAF-T export is available to a client on-demand, but at a minimum that the Practice performs a yearly SAF-T archive.
Due to the scope of data within the SAF-T archive this file "must" always be exported and encrypted at rest. All major Accounting Software, Oracle, SAP, Cognition etc., support SAF-T exports.

SAF-T can be opened, viewed, and utilised, via any industry standard spread sheet program, our accountants typically make use of Excel.




Disclaimer The contents of this site should not be understood to be accounting, taxation or investment advice but rather as general product related educational information that may or may not meet your specific requirements.