EM2812 - Examining Accounts: Computer Generated Records: Something goes wrong with the computer

Just like paper based records computer records can be altered, lost, destroyed or damaged. However, some of the risks are different to those for paper records. The common reasons given for the lack of data or the loss of computer records are as follows.

Powercuts

The only loss should be the small amount of data which has not been saved to disc, and this should be minimal in almost all circumstances.

Disk damage possibilities

• The only copy of the data was on a floppy disk and someone put their coffee on it. It is true that placing hot cups of coffee on floppy disks causes irreparable damage to some or all of the data. The actual amount of data lost varies according to the length of exposure to heat. Disks left on radiators or on window ledges also suffer in this way. Some of the data which has not been destroyed can be recovered.
• The only copy of the data was on a floppy disk and it was left close to a telephone, modem or fax machine. It is true that the magnetic fields generated by these items can damage data on floppy disks, but CDs are generally more resilient.

Deleted files

The files were deleted accidentally. It is possible to do this, but, the main operating systems for most small computers have a number of fail safe features in them. These include checking with the user by way of an on-screen message whether the user really wants to delete the file selected. It is easier accidentally to delete a file by selecting a whole batch of files to delete at once. In most modern software if a file has been deleted, the data has not actually been removed from the disk, only the filename. Large proportions of deleted files can be recovered but the sooner this is done after the deletion has taken place the more likely that it is that data will be recovered.

If it is claimed that accounting records or other data has been destroyed then ask

• about security backups or copies
• what the cause of the loss was
• what attempts were made to recover the records.

Countering Claims of Loss

If the computer was stolen and data was on the hard disk, there is likely to be some sort of insurance claim.

Suppliers and accountants emphasise the need to have back up security copies of all disks. If a claim that records have been lost or corrupted is made it suggests that the taxpayer has flown in the face of this advice and you may want to know why. Also what precautions does he or she now take? What did the accountant do to overcome the resultant problems?