The date is part of the fact
An audit asks what happened, how much, and when. Get the "when" wrong and the other two don't matter.
A transaction that is right in every other respect is still a misstatement if it lands in the wrong period, is valued at the wrong date's price, or is judged under a rule that wasn't in force. Auditing standards build this in: existence, occurrence and cutoff are all tests of a date. Accounting standards do the same. Subsequent-events rules separate conditions that existed at the balance-sheet date from those that arose later, and error-correction rules turn on what was known and knowable at the time.
Independent evidence, as of the date
Audit practice has answered the question "was this true on that date?" in the same way for close to a century: with evidence obtained independently, as of that date.
- 1938, McKesson & Robbins. Large fictitious assets were supported only by the company's own documents. The response made physical observation of inventory and direct confirmation of receivables, as of the balance-sheet date, standard audit procedure.
- 1969, United States v. Simon. Auditors were held responsible for what they knew, before signing, about conditions at the balance-sheet date. Following the letter of the rules was no defense.
- 2002, option grants. Once grants had to be reported publicly within two business days, the practice of recording grants on earlier, more favorable dates largely stopped. A record made at the time did what later reconstruction could not.
The auditing standards rank evidence the same way. Evidence from independent sources outweighs evidence an entity generates itself. Evidence obtained directly outweighs evidence passed along. Originals outweigh copies.
Three properties of a record that settles a dated question
- Made at the time. Captured when the source published it, not reconstructed afterwards.
- Controlled by neither party. Assembled before any dispute, serving every side the same way.
- Verifiable by anyone. Hashed, timestamped, and produced by a published, versioned method.
Most public registries that decide eligibility publish only their current state and overwrite the rest. That removes the first property, and it is the gap a dated archive fills.
How an audit escalates
| Tier | Data | Right needed | Produces |
|---|---|---|---|
| 1. Screening | Your own transactions, plus the independent dated record | None | Full-population flags, and a specific, dated showing |
| 2. By agreement | The counterparty's records under a contract or request | Contract | Findings backed by records |
| 3. Compelled | The counterparty's records under a regulator, statute or court | Formal gate | Enforceable findings |
Each tier's output is written as the next gate's exhibit. With LLM-assisted review, tier 1 can cover every transaction rather than a sample. The limits are no longer the cost of analysis but access to data and the time to review exceptions.
Beyond 340B
The same pattern appears wherever a status on a date decides an outcome and the public source overwrites it.
| Area | Test type | What turns on the date |
|---|---|---|
| Manufacturer government price reporting | Status on a date | Whether a sale to a 340B entity is excluded from Best Price |
| False Claims Act | Status on a date | Whether a certification was true when made |
| Provider exclusion screening | Status on a date | Whether a provider was excluded on the date of service |
| Nonprofit tax-exempt status | Status on a date | Exemption in force for the year, or on the purchase date |
| Employer health plans and PBMs | Terms or knowledge at the time | Which contract terms and which entities applied to each rebate and claim |
| Tax residence of affiliated entities | Terms or knowledge at the time | Where an entity resided and what it did in each year |
| Antitrust and settlement compliance | Evidence of conduct | The structure before and after each deadline |
Where the law tests a status on a date, a dated record decides the question. Where it tests conduct or contract terms, the dated record is evidence that helps reconstruct what happened, alongside discovery rather than in place of it.
This page describes principles and history for general information. It is not legal or accounting advice, and none of the historical cases implies anything about any party in the programs we cover.