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Evidence Trail Design

Source logs, timestamps, and version control—the infrastructure of reproducible valuation and the foundation of audit-ready work.

When auditors ask "how did you arrive at this number?", they're not asking for an explanation—they're asking for evidence. The difference between a valuation that survives scrutiny and one that triggers extended review often comes down to one thing: whether the evidence trail exists.

What Is an Evidence Trail?

An evidence trail is the documented chain linking every conclusion back to its source inputs. It answers three questions for any value in your deliverable:

1. Where did this data come from? (Source documentation)
2. When was it obtained? (Timestamp)
3. Has it changed since? (Version control)

Without this infrastructure, valuations become "trust me" documents—and auditors don't accept "trust me."

The Three Pillars of Evidence Infrastructure

1. Source Documentation

Every external input requires source documentation. This includes:

Input Type	Required Documentation
Market data (betas, risk premiums)	Database screenshot with date, source name, and extraction date
Financial statements	Filed document reference (10-K, audit report) with filing date
Management projections	Dated file received from client, email confirmation of version
Comparable transactions	Database name, search criteria, and extraction date
Industry benchmarks	Publication name, publication date, and page reference

The FairvalueX standard: Every deliverable includes a Source Log exhibit listing each external input with its source, access date, and file reference.

2. Timestamp Protocol

Valuation is a point-in-time exercise. Timestamps establish that inputs were contemporaneous with the valuation date and that the analysis was performed systematically.

Critical timestamps to maintain:

• Valuation Date: The effective date of the conclusion
• Data Extraction Date: When each market input was pulled
• Client Data Receipt Date: When projections and financials were received
• Analysis Completion Date: When calculations were finalized
• Report Issuance Date: When the deliverable was released

Auditors check for consistency. If your valuation date is December 31 but your beta data is from February, expect questions.

3. Version Control

Version control answers the question: "Is this the final version, and how do I know?"

Effective version control requires:

• Sequential numbering: Draft 1, Draft 2, Final
• Change logs: What changed between versions and why
• Supersession protocol: Clear marking of which version is authoritative
• Archive retention: Preserved copies of superseded versions

The FairvalueX standard: Every engagement produces a version log showing the progression from draft to final, with change descriptions and approval timestamps.

Building Evidence Trail into Your Process

At Intake

• Log all client-provided documents with receipt dates
• Confirm the valuation date and any critical cutoff dates
• Document which version of projections or financials will be used

During Analysis

• Screenshot market data extractions with visible dates
• Maintain a running source log as inputs are gathered
• Date-stamp all working files

At Delivery

• Include Source Log as a formal exhibit
• Reference specific sources in the body of the report
• Archive the complete working file package

What Happens Without Evidence Infrastructure

Valuations without proper evidence trails face predictable problems:

These problems compound. What starts as a documentation question becomes a credibility question.

The Reproducibility Test

The ultimate test of evidence infrastructure: could a qualified third party reproduce your analysis using only your documented sources?

If the answer is yes, your evidence trail is sufficient. If the answer is "they'd need to ask us some questions first," the trail has gaps.