Audit Support

We run the audit before the audit: reconcile-or-flag every balance sheet account, inventory the technical positions the auditors will have to conclude on (revenue, instruments, stock comp, leases, unusual transactions) and identify which have documentation, walk the equity history from formation because it is the first-year area most likely to be wrong, and test the availability of support for the estimates: reserves, accruals, impairment inputs. The output is a findings list with severity and an ordered remediation plan that slots into the time before fieldwork. For first audits, we scope the opening balance sheet work explicitly, prior-period revenue, cutoffs, and equity, because that is where re-audit surprises live. The assessment typically takes two to four weeks and converts audit-season unknowns into a work plan.

What you get: A findings list with severity and an ordered remediation plan, delivered in two to four weeks.

We build the client-assistance package to the request list before fieldwork opens: reconciliations for every account with support attached, rollforwards for equity, fixed assets, intangibles, debt, and reserves that tie beginning to ending balances, revenue support organized the way it will be sampled (contracts, invoices, evidence of delivery, cash receipt), and the estimate files with their inputs sourced. Everything ties: schedule to ledger, ledger to financial statements, so the auditors’ first week is testing rather than requesting. We also stage the population files for sampling and the IPE support (report parameters, query logic) auditors increasingly ask for. A maintained PBC library then rolls forward each period, which is why the second audit with us is always faster than the first.

What you get: A complete, tied-out PBC package built to the request list, maintained as a library that rolls forward every period.

Between readiness and fieldwork we close the position inventory. The judgment areas that recur are revenue (ASC 606), leases (ASC 842), stock compensation (ASC 718), business combinations (ASC 805), debt and equity classification (ASC 480 and 815), credit losses (ASC 326), goodwill and long-lived asset impairment (ASC 350 and 360), income taxes (ASC 740), going concern (ASC 205-40), and segment reporting (ASC 280), and each gets a memo: facts from the actual contracts, the governing guidance, the alternatives considered, the conclusion, and the entries and disclosure it drives, delivered to the audit team in advance so their review starts early. Where a position is genuinely close, we pressure-test it the way a national office would and, when useful, pre-discuss it with the engagement team before they formally test it, because surfacing the debate in October costs nothing and surfacing it in February costs the filing date. Prior-year positions get refreshed for fact changes rather than re-litigated. The goal is simple: by the first day of fieldwork, there is no significant judgment the auditors are seeing for the first time.

What you get: A memo for every judgment area, delivered to the audit team before fieldwork opens.

We run the request list as a managed process: a single tracker shared with the audit team, every item with an owner and a date, daily triage of new requests, and aging visible so nothing quietly stalls. Sample support is pulled from the pre-staged populations; auditor questions route through us so answers are consistent and the internal team is interrupted once, not five times; and a weekly status call with the engagement team keeps open items, timing risks, and emerging issues on the table instead of in email threads. When exceptions surface, we investigate and respond with analysis rather than letting items sit as untested differences. The internal close continues in parallel because the audit load is carried on our side. The measure of this phase is boring and objective: request-list aging and the number of items open at the end of each week.

What you get: A managed request list with an owner and date on every item, weekly status, and your team interrupted once instead of five times.

We manage the endgame deliberately: proposed adjustments are either supported with analysis or booked promptly, because arguing weak positions spends credibility needed for strong ones; the summary of uncorrected misstatements is evaluated quantitatively and qualitatively with our own materiality analysis, independent of the auditors’; control observations are triaged into the deficiency evaluation on the AS 2201 test of likelihood and magnitude, so a gap is graded as a control deficiency, a significant deficiency, or a material weakness on the exposure it creates rather than on the size of the error that happened to surface it, with the conclusion calibrated with the auditors before year-end so a fourth-quarter surprise does not decide it; and genuine technical disagreements are escalated properly, our position paper against theirs, consultation if needed, resolved on the guidance rather than on fatigue. We also manage the closing mechanics that stall opinions: the representation letter, subsequent events support through the report date, and the final tie-out of the financial statements to the audited numbers. The opinion should be the anticlimax.

What you get: Adjustments supported or booked, the misstatement summary evaluated with our own materiality analysis, and the closing mechanics run to the opinion date.

For errors, the sequence is fixed: quantify across all affected periods, then run the materiality evaluation that determines Big R restatement versus little r revision, testing the error quantitatively, against SAB 99’s qualitative factors (whether it masks an earnings trend, turns a loss into income, hides a miss against analyst estimates, affects loan-covenant or regulatory compliance, increases management compensation, or conceals an unlawful transaction), and under both the rollover and iron curtain methods of SAB 108, so the conclusion holds under both rather than only the method that produces the smaller misstatement. From there we coordinate the Item 4.02 non-reliance decision, and the four-business-day 8-K it triggers, with counsel where required, prepare the restated statements and disclosure, and feed the root cause into the control evaluation, because a restatement is a strong material-weakness indicator. One consequence that now reaches both paths: the Dodd-Frank Rule 10D-1 clawback, effective 2023, requires recovery of erroneously awarded incentive compensation on both Big R and little r restatements, so the classification is a compensation question as well as a filing one. For SEC comment letters, we draft responses that answer the question asked, with the accounting analysis attached and revised disclosure proposed, closing letters in one round where the position supports it. And for companies that simply want a better next audit, the fix is the loop above run from month one: the PBC library maintained through the year, positions written when transactions happen, and a readiness check each fall. Companies that adopt the cadence stop having audit seasons and start having audit weeks.

What you get: Quantification, the Big R versus little r evaluation, restated statements or comment responses, and the process fixes that prevent a repeat.