Be aware: New laws are here; Although regulations related to these laws are still in the proposal stage, the laws became effective Jan. 1, 2003. (News & Trends).

Documentation

Audit documentation must be retained for seven or more years. And all firms, whether hey serve public or private companies, must have written retention and destruction policies for audit documentation.

The new law also establishes a rebut-table presumption. Beginning Jan. 1, 2003, you must supply and retain work papers that would allow any reviewer with relevant knowledge and experience (but having no previous experience with the engagement) to understand the audit.

If such papers are not in the engagement file and there is a dispute, the burden of proof shifts to the CPA to show .hat the appropriate work was performed. f the papers are …