Tim,

Here's a way:

> create field «Candidate documents Count» to store the number of documents in the folder with field «Approval Status»

> create field «Approved documents Count» to store the number of documents in the folder whose field «Approval Status» equals to 'Approved'

> create a workflow with rules for documents 1) created in folder with field «Approval Status», 2) deleted from folder, 3) restored into folder with field «Approval Status» , 4) moved from folder with field «Approval Status», 5) moved into folder with field «Approval Status» or 6) changed. That workflow has to recompute and assign the above 2 fields to the document's parent folder

> create another workflow with a single rule for folders changed whose field «Approved documents Count» equals «Candidate documents Count»