1. (a) Upon request, regardless of the status of the client or former client's account, a person shall provide to the client or former client any accounting or other records, either in hard copy or other useable form, belonging to, or obtained from or on behalf of, the client that the person removed from the client's premises or received on behalf of the client. A person may make and retain copies of such records when they form the basis of work done by him. For a reasonable charge, a person shall furnish to his client or former client, upon request made within a reasonable time after original issuance of the document in question:

   1. (1) a copy of the client's tax return;
   2. (2) a copy of any report or other document previously issued by the person to or for such client provided that furnishing such reports to or for a client or former client would not cause the person to be in violation of the portions of §501.60 of this title (relating to Auditing Standards) concerning subsequent events;
   3. (3) a copy of the person's work papers, to the extent that such work papers include records which would ordinarily constitute part of the client's books and records and are not otherwise available to the client.
2. (b) A person, when performing an engagement that is terminated prior to the completion of the engagement, is required to return or furnish the originals of only those records originally obtained by the person from the client.

3. (c) Work papers developed by a person during the course of a professional engagement as a basis for, and in support of, an accounting, audit, consulting, tax, or other professional report prepared by the person for a client, shall be and remain the property of the person who developed the work papers.

   1. (1) Work papers, whether in the form of hard copy or computer readable format, are those documents developed by the person incident to the performance of his engagement which do not result in changes to the client's records or are in part of the records ordinarily maintained by the client.
   2. (2) Analyses of inventory or other accounts as part of the person's selective audit procedures, even when prepared by client personnel at the request of the person, are the person's work papers.
   3. (3) If the analyses described in paragraph (2) of this subsection result in changes to the client's records, the person is required to furnish the details from his work papers in support of the journal entries recording such changes unless the journal entries themselves contain all necessary details.

4. (d) Work papers include, but are not limited to:

   1. (1) letters of confirmation and representation;
   2. (2) excerpts of company documents;
   3. (3) audit programs;
   4. (4) internal memoranda;
   5. (5) schedules;
   6. (6) flowcharts; and
   7. (7) narratives.

5. (e) Work papers which constitute client records include, but are not limited to:

   1. (1) documents in lieu of books of original entry such as listings and distributions of cash receipts or cash disbursements;
   2. (2) documents in lieu of general ledger or subsidiary ledgers, such as accounts receivable, job cost and equipment ledgers, or similar depreciation records;
   3. (3) all adjusting and closing journal entries and supporting details when the supporting details are not fully set forth in the explanation of the journal entry; and
   4. (4) consolidating or combining journal entries and documents and supporting detail in arriving at final figures incorporated in an end product such as financial statements or tax returns.
6. (f) Documentation or work documents required by professional standards for attest services shall be maintained in paper or electronic format by a person for a period of not less than five years from the date of any report issued in connection with the attest service, unless otherwise required by another regulatory body. Failure to maintain such documentation or work papers constitutes a violation of this section and may be deemed an admission that they do not comply with professional standards.
7. (g) Interpretive Comment: It is recommended that a person obtain a receipt or other written documentation of the delivery of records to a client.

Source Note:The provisions of this §501.76 adopted to be effective June 11, 2000, 25 TexReg 5339; amended to be effective December 6, 2001, 26 TexReg 9859; amended to be effective February 4, 2004, 29 TexReg 963; amended to be effective February 17, 2008, 33 TexReg 1094.