Annual Financial Reporting Checklist

Three-way tie-out: internal billing calculation, custodian fee debit (Schwab/Fidelity/Pershing/Altruist), and the client invoice. Variances of more than a few cents per account usually trace to mid-quarter funding, intra-period allocation changes, or a basis mismatch (period-start vs. average-daily vs. period-end). Document each variance and the resolution.

Operating bank, payroll, and any escrow / trust accounts. Open items older than 30 days get written explanations. The CCO will need this clean before the surprise exam window opens.

Any year-end balance in the firm error account needs a documented disposition — restitution paid, loss absorbed by the firm, or open items rolling into the next year with an explanation. Examiners pull this on every routine RIA exam.

Pull regulatory AUM from Black Diamond / Orion / Tamarac / Addepar and tie out to custodian totals at Schwab, Fidelity, Altruist, or Pershing. This number drives Item 5 of Form ADV Part 1A and determines whether the firm is SEC-registered ($100M+) or state-registered for the coming year.

Classified balance sheet with prior-year comparative. Watch for accrued advisory fees receivable, deferred rent, and any earn-out or contingent consideration from a sub-advisor or tuck-in transaction.

Break out advisory fee revenue from financial planning fees, 12b-1 / trail revenue, solicitor referral revenue, and any insurance commission revenue. Auditors and the SEC look at the revenue mix when assessing conflicts disclosure on Form ADV Part 2A.

Cover related-party arrangements, revenue recognition policy under ASC 606 (advisory fees recognized over the service period), lease accounting under ASC 842, and any subsequent events through the report date. Get the related-party note right — it traces back to the conflicts disclosure in ADV Part 2A.

Direct deduction of advisory fees does not count. Custody is typically triggered by SLOAs to third parties, trustee positions on client accounts, GP / managing-member roles in pooled vehicles, or holding client passwords. Walk the SLOA inventory before answering — this is the single most-cited Form ADV inaccuracy in SEC exams.

Required under Rule 206(4)-2 when the firm has custody and is not relying on the audit exception. Confirm PCAOB registration in advance — using a non-registered CPA is an automatic deficiency. Form ADV-E is filed by the auditor within 120 days of the exam date.

Joint review focused on revenue mix, related-party items, and any disclosures that ripple into Form ADV Part 2A or Form CRS. Capture any reclassifications before management review.

Open a remediation log with named owner, root cause, corrective JE, and verification step. The same log feeds the management representation letter to external auditors and the CCO's annual Rule 206(4)-7 review.

Prepared-by-client schedules: trial balance, GL detail, custodian statements, fee invoices, advisory agreements sample, payroll register, lease agreements, and prior-year audit workpapers. Stage in NetDocuments / ShareFile / Box with permissions set before the kickoff call.

Same-day acknowledgment, 48-hour substantive response. Track open requests in a single shared tracker so the audit partner sees one source of truth instead of email threads.

For each comment, log the proposed remediation, owner, and target date. Repeat-year findings are the ones that get cited at the SEC exam — close them by next quarter.

Due within 90 days of fiscal year end. Update Items 5 (AUM, accounts, employees), 7 (financial industry affiliations), 8 (participation in client transactions), and 9 (custody). Cross-check the custody answer against the SLOA audit workpaper from the earlier step.

Annual brochure delivery within 120 days of fiscal year end — either the full updated brochure or a summary of material changes plus an offer of the full brochure. Capture per-client delivery confirmation in the CRM (Wealthbox / Redtail / Salesforce FSC); examiners sample this list.

If anything material changed (fees, services, conflicts, disciplinary), file the updated CRS within 30 days and deliver to existing retail clients within 60 days. Replace the version on the public website the same day it's filed.

Notice filings for every state where the firm has six or more clients (or hits the de minimis trigger). IAR registrations renew on the calendar via FINRA's annual renewal program — confirm CRD shows paid before year-end.