Following on from the announced series of articles on the legal aspects of digitization, we continue with an article on electronic accounting and its advantages, disadvantages, and consequences of its application in practice.
The growing number of electronic accounting records has also prompted Slovak lawmakers to digitize and electronic accounting by adopting an amendment to Act No. 431/2002 Coll. on Accounting (hereinafter referred to as the "Accounting Act") effective from January 1, 2022, namely Act No. 456/2021 Coll., amending Act No. 431/2002 Coll. on Accounting, as amended.
The Accounting Act stipulates that the accounting documentation of an accounting entity consists of a summary of all accounting records created in accordance with Section 4(5) of the Accounting Act.
According to the new legislation, accounting records may be made in paper or electronic form, both forms being legally equivalent (however, electronic form is only one of the options; accounting may still be kept in the traditional paper form). An electronic accounting record is understood to mean an accounting record (e.g., invoice, tax return, bank statement, etc.) made:
- in electronic format and received or made available in electronic format, whereby the electronic format is determined by the creator of the accounting record or is determined by agreement with the recipient of the accounting record,
- by guaranteed conversion or scanning, sent electronically, whereby it may form an attachment to an email,
- in electronic format for internal purposes of the accounting entity.
The accounting entity is obliged to ensure the authenticity of the origin, integrity of the content and legibility of the accounting record from the moment of its creation or from the moment of its receipt or disclosure until the end of the period specified in Section 35(3) of the Accounting Act, and this obligation also applies to the transfer of accounting records to another person. 3 of the Accounting Act, and this obligation also applies to the transfer of accounting records to another person.
The authenticity of the origin of the accounting record is ensured if the accounting entity that is the creator is able to prove that it actually created the accounting record and the accounting entity that is the recipient is able to prove that the accounting record received is from the creator. The integrity of the content of an accounting record is ensured if the sending or making available of the accounting record or the transformation of the accounting record in the accounting entity has not resulted in a change in the content of the facts recorded in the accounting record. The legibility of an accounting record is ensured if the content of the accounting record is legible to the human eye. When ensuring the legibility of an accounting record, the accounting entity is obliged to maintain the integrity of its content.
If an electronic accounting record is sent or otherwise made available to another person, the use of the electronic accounting record is subject to a written agreement between the parties involved or the consent of the recipient of the accounting record. Consent is deemed to have been given by information on the acceptance of the accounting record, which also includes the actual payment of the amount requested on the basis of the electronic invoice sent.
When signing an electronic accounting record, a handwritten signature, a qualified electronic signature or a similar verifiable signature record replacing a handwritten signature in electronic form, which allows for the unambiguous and verifiable identification of the person who made the signature record, may be used.
The transformation of an accounting record means a change in the form of an accounting record during its processing in an accounting entity, while the integrity of the content of the accounting record remains unchanged. A change in the form of an accounting record is a change from a paper form of an accounting record to an electronic form of an accounting record or a change from an electronic form of an accounting record to a paper form of an accounting record. An accounting entity may transform an accounting record only if the accounting record is verifiable. In accordance with the chosen method of storing accounting records, an accounting entity may transform an accounting record that has not yet been transformed, while being obliged to store the accounting record in the form resulting from the transformation of the accounting record.
An accounting entity which does not keep accounting records in electronic form may transform accounting records from electronic form into paper form by means of a guaranteed conversion in accordance with specific regulations or in a manner in accordance with the Accounting Act, if the accounting record does not contain a qualified electronic signature or a qualified electronic seal.
When converting accounting records by scanning them into a file format in raster graphic form, the accounting entity shall ensure:
- the completeness of the accounting record in its original form and in its new form
- the content and visual consistency of the accounting record in its new form with its original form,
- the legibility of the entire area of the accounting record in its new form
- the integrity of the content of the accounting record.
The conversion of an accounting record from paper form to electronic form may be performed by means of a guaranteed conversion or by scanning into a file format in raster graphic form (PDF, PNG, JPG, TIFF, etc.). An electronic accounting record may be converted into paper form by means of a guaranteed conversion or, if the electronic accounting record does not contain a qualified electronic signature or a qualified electronic seal, it may simply be printed out while preserving the integrity and legibility of the content.
From January 1, 2022, accounting documents must be stored in the Register of Financial Statements only in electronic form that allows for automated data processing. Failure to store accounting documents in electronic form is punishable by law as an administrative offense.
The introduction of electronic accounting has various consequences, which can be considered both negative and positive depending on the subjective opinion of the accounting entity. However, there is general agreement that eliminating the handling of paper documents saves the environment (especially paper, printers, printer ink, binders, plastic sleeves, and other necessary office supplies, including physical space for archiving paper documents and securing this space from third parties). On the other hand, however, it is necessary to provide an accounting unit for the handling and archiving of electronic accounting and overall cyber security of data - software, data storage, so-called antivirus protection, electricity and cooling costs for equipment, and, in addition, training and education of competent persons when introducing electronic accounting. This results in costs for the accounting entity in the form of software solutions for accounting entities (often customized), various cloud storage solutions for archiving accounting records, and training or education costs. In general, we can also conclude that electronic accounting is more secure in terms of its physical storage (it cannot be easily lost or destroyed, e.g. by fire or flood), as its existence even on physical devices is guaranteed by multiple levels of protection. On the other hand, however, there is a risk of misuse by third parties if its software protection is breached. In addition, electronic accounting facilitates work with accounting documents, as the system can "read" documents, including their details (e.g., invoice number, date, supplier, customer, etc.) , thus eliminating the risk of obvious errors when writing or reading or further working with electronic accounting records.
The transfer of obligations to the electronic environment thus leads to a reduction in administrative work in the field of accounting, with the added value of having a positive impact on the environment.
