Audit Preparation Checklist

Pull the signed engagement letter and confirm the framework (US GAAP vs. IFRS), level of service (audit vs. review vs. compilation), reporting deadline, and any agreed-upon procedures riders. Flag any scope changes since prior year — new subsidiaries, ASC 842 adoption, ERC claims — that warrant a change order before fieldwork.

Import the auditor's PBC request list into Suralink (or Onehub / Liscio) and assign owners across accounting, payroll, and tax. Roll forward last year's list and reconcile additions — common adds: lease right-of-use roll-forward, stock-comp grants, related-party schedules.

Tie each operating, payroll, and credit-card account from the bank statement to the GL. Clear stale outstanding checks older than 90 days; flag any unreconciled items over $1,000 for separate workpaper. Auditors will trace bank confirmations to these recs.

Run the A/R aging as of the balance-sheet date and tie the total to the GL control account. Document the bad-debt reserve methodology and any specific reserves on accounts over 90 days.

Reconcile A/P sub-ledger to GL. Pull a search-for-unrecorded-liabilities (post-period payments and unprocessed invoices) — auditors will request this directly. Accrue legal, audit, and bonus accruals.

Roll forward the FA register: beginning balance + additions − disposals = ending. Recompute current-year depreciation by class. Tie to GL and to the Form 4562 if shared with tax. Document capitalization-policy threshold ($2,500 / $5,000) for any borderline items.

Book accruals (payroll, vacation, bonus), prepaid amortization, deferred revenue recognition, and any reclasses identified during recs. Every AJE needs a memo and supporting workpaper — auditors will sample these.

Export the trial balance with current-year, prior-year, and variance columns. Group accounts by financial-statement caption so lead schedules tie cleanly. Auditors typically import the WTB into Caseware or CCH ProSystem fx for tickmark testing.

One lead schedule per caption: cash, A/R, inventory, fixed assets, A/P, accrued liabilities, debt, equity, revenue, payroll. Each ties to the WTB and references supporting workpapers. Use prior-year format so the auditor can roll forward.

Compute year-over-year and budget-vs-actual variance on revenue, gross margin, opex line items, and key ratios (DSO, DPO, inventory turns, current ratio). Document explanations for any variance over the auditor's performance materiality threshold — usually 5% or $X.

Roll forward last year's control matrix. Mark each key control as unchanged, modified, or new. Common changes: new ERP go-live, segregation-of-duties remediation, automated bank-feed approval workflows.

Schedule a walkthrough meeting for each modified or new control. Bring the process owner — not just the controller — so the auditor can document the design and operation. Updated narratives and flowcharts go into the audit file.

Tie the ASC 740 provision workbook to the GL: current federal/state, deferred tax assets and liabilities, valuation allowance assessment, rate reconciliation. Coordinate with the tax preparer on PTET, R&D credit, and any uncertain tax positions (FIN 48).

For each UTP, prepare a more-likely-than-not memo citing the relevant Code section, regulations, and case law. Quantify the position and the FIN 48 reserve. Auditors will request these memos during fieldwork.

Pull a 50-state economic-nexus summary from Avalara or TaxJar; flag any new states crossing the $100K / 200-transaction threshold. Confirm Forms 941, 940, and state SUTA/SIT filings are current and tie to the GL payroll-tax accruals.

Controller reviews the full PBC binder for completeness, cross-references, and tickmark consistency. Open items list with named owners and target dates for anything still outstanding.

Mark all PBC items complete in Suralink, send the cover memo summarizing scope changes and open items, and confirm fieldwork logistics (workspace, system access, point-of-contact).