§ 1229.124 Documentation standards.

Every audit performed by a State under a delegation of authority must meet certain documentation standards. In particular, detailed workpapers must be developed and maintained. (a) Workpapers are defined to include all records obtained or created in performing an audit. (b) Each audit performed varies in scope and detail. As a result, the audit team must determine the best presentation of the workpapers for a particular audit. The following general standards of workpaper preparation are consistent with the goal of achieving proper documentation while maintaining sufficient flexibility. (1) All relevant information obtained orally must be promptly recorded in writing and incorporated in the workpapers. (2) Workpapers must be complete and accurate in order to provide support for findings and conclusions. (3) Workpapers should be clear and understandable without the need for supplementary oral explanations. The information they contain must be clear, complete, and concise, so that anyone using the workpapers will be able to readily determine their purpose, the nature and scope of the work done, and the conclusions drawn. (4) Workpapers must be legible and as neat as practicable. They must meet standards which allow their use as evidence in judicial and administrative proceedings. (5) The information contained in workpapers should be restricted to matters which are materially important and relevant to the objectives established for the assignment. (6) Workpapers must be in sufficient detail to permit a subsequent independent execution of each audit procedure, assuming the target company retains its accounting documentation.