[animalwithin]

My dad is a CPA and I’ll be taking over the business. While he’s very lucrative and the firm is quite large, the office is a mess.

Clients literally give him giant boxes full of receipts, checks, bank/card statements every month and as a result, the office is a mess with very little organization to it all.

I told him to return it all to the clients after we’re done generating the financial statements and he said he can’t because it they lose it and an audit happens, we’d be screwed.

My question: beyond financial statements (P&L’s, balance sheets, tax returns, etc.) who is responsible for storing the other stuff like receipts, bank statements, etc., the client or the CPA?

[Recked]

The client is ultimately responsible but if you are the one compiling the information to go on the returns then I would recommend you keep the backup to save your own ass for at least the 3 year statute of limitations, but keep in mind the additional 3 years for anything involving basis.
I would think MOST things are pretty safe to get rid of after the 3 year limit.

It sounds like you are handling the monthly bookkeeping and financial statement preparation that ultimately ends up on the tax return.
If any of your clients end up in an audit the first thing they will say is, I dunno the accountant did it and shrug their shoulders.
You really don't want to end up with a negative review online saying the accountant put a bunch of numbers on the return then could not back it up.

If you have staff, a high speed scanner, and room on your hard drive, you can start converting the bank statements and other necessary documentation to a digital format and return the rest to clients. Don't forget a regular backup system, both onsite and offsite. It becomes more of an issue as you convert to digital storage.

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