A finished Study cannot be checked by reading it

You can read a compensation figure and still have no way to test it. What makes a Study defensible is the trail behind the number: where each input came from, who touched it, and what was decided. Here is how that trail gets built.

Get startedSee how a Study is built

1. Intake

What happens
The engagement is opened and the facts a Study depends on are captured in one structured place: the entity, the shareholder-employee, the role actually performed, the period under study, and the compensation already recorded.
Who does it
Preparer, Firm
What is produced
An engagement record that fixes the scope and the period every later step is measured against.
Uncheckable without this step
Without a fixed scope, two people can reach different figures from the same file and neither can say which one answered the right question.
Illustration of intake: a form and a document tray feeding one file

2. Evidence

What happens
Each fact the Study relies on is attached to its source. Duties come from what the shareholder-employee actually does, comparability draws on published federal wage data, and every item carries the reference it came from.
Who does it
Preparer
What is produced
A set of source-linked records, each one traceable back to the document or public dataset it came from.
Uncheckable without this step
Without a source on every input, a reviewer has to take the preparer’s word for it, which is exactly the position a Study exists to avoid.
Illustration of evidence: stacked source records linked to a record card

3. Calculation

What happens
The Study applies the approaches the IRS recognizes for valuing an owner’s services and works from published federal wage data. Where the facts call for an adjustment, the adjustment is recorded with the reason it was made.
Who does it
Preparer
What is produced
A reasonable-compensation figure with every adjustment behind it stated and given a documented rationale.
Uncheckable without this step
Without a written reason beside each adjustment, the figure is an assertion. With one, a reviewer can agree or disagree with a specific decision instead of the whole result.
Illustration of calculation: three inputs resolving to one figure card

4. Review

What happens
A reviewer at your firm works through the Study, sees each input next to its source and each adjustment next to its rationale, and signs off. The sign-off is a person taking responsibility, recorded as part of the file.
Who does it
Reviewer
What is produced
A signed-off Study carrying the identity of the reviewer who accepted it and the date they did.
Uncheckable without this step
Without a recorded sign-off, nothing in the file says who stood behind the conclusion, and the firm cannot show that anyone did.
Illustration of review: a checklist panel beside a sign-off line

5. Deliverable

What happens
The Study is assembled into a workpaper set you can hand to a client, attach to a file, or produce on request. It travels with its evidence rather than pointing back at a system the reader cannot open.
Who does it
Preparer, Reviewer
What is produced
A complete workpaper set, self-contained and readable without access to the platform that made it.
Uncheckable without this step
Without a self-contained deliverable, the trail lives inside a tool, and anyone outside it has to trust a summary instead of checking the work.
Illustration of the deliverable: a bound workpaper set with a cover page

6. Retention

What happens
The finished Study is retained as part of your records. Finalized evidence and workpapers belong to your firm permanently, and the file stays available to the people who need it later.
Who does it
Firm
What is produced
A retained record your firm owns outright, kept for the years in which someone may ask about it.
Uncheckable without this step
Without retention, a Study is defensible only until the file is gone, and the questions that make it matter usually arrive later.
Illustration of retention: a filed archive box with a download arrow

Who does what

Three roles carry a Study. Not every role acts at every step, and the table says so rather than leaving it implied.

StepPreparerReviewerFirm
1. IntakeOpens the engagement and captures the entity, role and period.No action at this stepSets the scope of the engagement it is taking on.
2. EvidenceAttaches every input to the document or public dataset behind it.No action at this stepNo action at this step
3. CalculationApplies the recognized approaches and records a reason for each adjustment.No action at this stepNo action at this step
4. ReviewNo action at this stepWorks through the inputs and rationales and signs off, or sends it back.No action at this step
5. DeliverableAssembles the workpaper set from the reviewed Study.Confirms the assembled set matches what was signed off.No action at this step
6. RetentionNo action at this stepNo action at this stepHolds the finished evidence and workpapers as records it owns.

How long is a finished Study downloadable after we cancel?

Finalized evidence and workpapers belong to your firm permanently. If you cancel, Studies stay downloadable for three years from the cancellation date, so a file you finished this year is still in reach when someone asks about it later. Reasonable compensation is a yearly question, and a Study you can still open is what makes this year’s answer comparable to last year’s.

Questions about the process

Does TracePrep decide the compensation figure for us?
No. The Study assembles the evidence and shows the reasoning, and a reviewer at your firm decides whether to accept it. The sign-off is a person taking responsibility, and the platform records who and when rather than standing in for them.
What does a reviewer actually see?
Each input next to the source it came from, and each adjustment next to the reason it was made. That is what makes a review a review: the reviewer can disagree with one specific decision rather than accepting or rejecting a finished number.
Where does the wage data come from?
Published federal wage data, cited in the Study so a reader can go and look at the same source. Nothing rests on a private benchmark that the person reading the file cannot check for themselves.
Who owns the workpapers?
Your firm does. Finalized evidence and workpapers are yours permanently, and the deliverable is self-contained, so it stays readable without access to the platform that produced it.
Do we need to start over every year?
No. Reasonable compensation is a yearly question, and each year builds on a file you can still open. Because the prior Study is retained with its evidence intact, this year’s work starts from a record rather than from memory.

See what a Study looks like when it is finished

Start an engagement and work through the six steps on a real file.

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