What it is
A retention policy is more than a number of years. It lists each record type, the authority behind the minimum, when the clock starts, and what the firm chooses. This workbook starts from the periods in primary sources, then turns the policy into a destruction date for each file.
The Schedule sheet flags any firm period below the cited minimum. The Destruction Review sheet calculates the earliest destruction date from a trigger date, shows retain or eligible for review, flags legal holds and checks that nothing was disposed of early or while on hold.
When to use it
- Writing or updating the firm’s retention policy.
- Annual file purge after busy season.
- Responding to a client or regulator request that depends on how long you must keep records.
What’s inside
- Schedule: 16 record types with authority, trigger, minimum years, firm period and an OK or Below minimum check
- Destruction Review: 150 rows with trigger date, firm period lookup, earliest destruction date, hold, status and disposition checks
- Instructions that state what the periods cover and what they do not
Standard cited
This template follows AU-C 230; AS 1215; IRC 6107(b); 2 CFR 200. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 230 explained.
Questions
How long must audit documentation be kept?
Five years from the report release date for nonissuer audits under AU-C 230, and seven years from the report release date for audits under PCAOB standards (AS 1215, from Section 103 of the Sarbanes-Oxley Act). For federal awards, 2 CFR 200.517(a) requires the auditor to keep audit documentation and reports for at least three years after the report goes to the auditee, and an agency can extend that by written notice.
How long must preparers keep copies of returns?
Three years after the close of the return period in which the return was presented for signature (IRC 6107(b) and 26 CFR 1.6107-1), counted from the later period if the due date with extensions falls in a later one. A list showing the taxpayer name, taxpayer identification number, tax year and type of return will meet the rule, with a record of the signing preparer. Many firms keep full copies for longer.
What about employee and payroll records?
Under the Fair Labor Standards Act regulations, payroll records are kept three years from the last entry (29 CFR 516.5), and time cards and wage rate tables two years (29 CFR 516.6). IRS guidance says employment tax records are kept four years after the tax is due or paid, whichever is later.
Does this cover state requirements?
No. State law, the board of accountancy, your professional liability carrier and client contracts can require longer periods. Enter the longest applicable period as the firm period and have counsel review the policy.
Related templates
- Client Data Retention and Destruction Checklist for CPA Firms
- Client Disengagement Letter
- Client Acceptance and Continuance Checklist
- Engagement Partner Review Checklist (Audit)
Last updated 11/05/2026. All free templates.