Sec.  64.904   Independent audits.

   (a) Each carrier required to file a cost allocation manual shall elect to
   either have an attest engagement performed by an independent auditor every
   two years, covering the prior two year period, or have a financial audit
   performed by an independent auditor every two years, covering the prior two
   year period. In either case, the initial engagement shall be performed in
   the  calendar  year after the carrier is first required to file a cost
   allocation manual.

   (b) The attest engagement shall be an examination engagement and shall
   provide a written communication that expresses an opinion that the systems,
   processes, and procedures applied by the carrier to generate the results
   reported  pursuant  to   Sec. 43.21(e)(2)  of  this chapter comply with the
   Commission's Joint Cost Orders issued in conjunction with CC Docket No.
   86–111, the Commission's Accounting Safeguards proceeding in CC Docket No.
   96–150, and the Commission's rules and regulations including  Sec.  Sec. 32.23 and
   32.27 of this chapter, and  Sec. 64.901, and  Sec. 64.903 in force as of the date of
   the auditor's report. At least 30 days prior to beginning the attestation
   engagement, the independent auditors shall provide the Commission with the
   audit program. The attest engagement shall be conducted in accordance with
   the attestation standards established by the American Institute of Certified
   Public Accountants, except as otherwise directed by the Chief, Enforcement
   Bureau.

   (c) The biennial financial audit shall provide a positive opinion on whether
   the  applicable  date shown in the carrier's annual report required by
    Sec. 43.21(e)(2) of this chapter present fairly, in all material respects, the
   information of the Commission's Joint Cost Orders issued in conjunction with
   CC Docket No. 86–111, the Commission's Accounting Safeguards proceeding in
   CC Docket No. 96–150, and the Commission's rules and regulations including
    Sec.  Sec. 32.23 and 32.27 of this chapter, and  Sec. 64.901, and  Sec. 64.903 in force as of
   the date of the auditor's report. The audit shall be conducted in accordance
   with generally accepted auditing standards, except as otherwise directed by
   the Chief, Enforcement Bureau. The report of the independent auditor shall
   be filed at the time that the carrier files the annual reports required by
    Sec. 43.21(e)(2) of this chapter.

   [ 67 FR 5702 , Feb. 6, 2002, as amended at  67 FR 13229 , Mar. 21, 2002]