SECTIONS 5097-5098 - California Statutes

BUSINESS AND PROFESSIONS CODE

SECTION 5097-5098

5097. (a) Audit documentation shall be a licensee's records of the
procedures applied, the tests performed, the information obtained,
and the pertinent conclusions reached in an audit engagement. Audit
documentation shall include, but is not limited to, programs,
analyses, memoranda, letters of confirmation and representation,
copies or abstracts of company documents, and schedules or
commentaries prepared or obtained by the licensee.
(b) Audit documentation shall contain sufficient documentation to
enable a reviewer with relevant knowledge and experience, having no
previous connection with the audit engagement, to understand the
nature, timing, extent, and results of the auditing or other
procedures performed, evidence obtained, and conclusions reached, and
to determine the identity of the persons who performed and reviewed
the work.
(c) Failure of the audit documentation to document the procedures
applied, tests performed, evidence obtained, and relevant conclusions
reached in an engagement shall raise a presumption that the
procedures were not applied, tests were not performed, information
was not obtained, and relevant conclusions were not reached. This
presumption shall be a rebuttable presumption affecting the burden of
proof relative to those portions of the audit that are not
documented as required in subdivision (b). The burden may be met by a
preponderance of the evidence.
(d) Audit documentation shall be maintained by a licensee for the
longer of the following:
(1) The minimum period of retention provided in subdivision (e).
(2) A period sufficient to satisfy professional standards and to
comply with applicable laws and regulations.
(e) Audit documentation shall be maintained for a minimum of seven
years which shall be extended during the pendency of any board
investigation, disciplinary action, or legal action involving the
licensee or the licensee's firm. The board may adopt regulations to
establish a different retention period for specific categories of
audit documentation where the board finds that the nature of the
documentation warrants it.
(f) Licensees shall maintain a written documentation retention and
destruction policy that shall set forth the licensee's practices and
procedures complying with this article.

5098. The board may adopt regulations to implement, interpret, and
make specific provisions relating to the following:
(a) Requirements for licensees maintaining an audit documentation
retention policy and procedures for review and approval of audit
documentation destruction.
(b) Procedures for the identification, dating, and retention of
audit documentation.