Sec. 53.211  Audit planning.

    (a) Before selecting a independent auditor, the Bell operating 
company shall submit preliminary audit requirements, including the 
proposed scope of the audit and the extent of compliance and substantive 
testing, to the Federal/State joint audit team organized pursuant to 
Sec. 53.209(d);
    (b) The Federal/State joint audit team shall review the preliminary

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audit requirements to determine whether it is adequate to meet the audit 
requirements in Sec. 53.209 (b). The Federal/State joint audit shall 
have 30 days to review the audit requirements and determine any 
modifications that shall be incorporated into the final audit 
requirements.
    (c) After the audit requirements have been approved by the Federal/
State joint audit team, the Bell operating company shall engage within 
30 days an independent auditor to conduct the biennial audit. In making 
its selection, the Bell operating company shall not engage any 
independent auditor who has been instrumental during the past two years 
in designing any of the accounting or reporting systems under review in 
the biennial audit.
    (d) The independent auditor selected by the Bell operating company 
to conduct the audit shall develop a detailed audit program based on the 
final audit requirements and submit it to the Federal/State joint audit 
team. The Federal/State joint audit team shall have 30 days to review 
the audit program and determine any modifications that shall be 
incorporated into the final audit program.
    (e) During the course of the biennial audit, the independent 
auditor, among other things, shall:
    (1) Inform the Federal/State joint audit team of any revisions to 
the final audit program or to the scope of the audit.
    (2) Notify the Federal/State joint audit team of any meetings with 
the Bell operating company or its separate affiliate in which audit 
findings are discussed.
    (3) Submit to the Chief, Common Carrier Bureau, any accounting or 
rule interpretations necessary to complete the audit.

[ 62 FR 2926 , Jan. 21, 1997]