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Audit Walkthrough Guide

The document provides guidance on conducting a preliminary review of a prospective client's books before taking them on as an official client. It outlines specific areas to examine like assets, liabilities, equity, bank reconciliations, sales tax payments, income and expenses to evaluate the state of their books and determine how much cleanup work will be required.

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mah love
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85 views1 page

Audit Walkthrough Guide

The document provides guidance on conducting a preliminary review of a prospective client's books before taking them on as an official client. It outlines specific areas to examine like assets, liabilities, equity, bank reconciliations, sales tax payments, income and expenses to evaluate the state of their books and determine how much cleanup work will be required.

Uploaded by

mah love
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Practical & Tactical Notes- Reviewing the Books of

Prospective Clients
This is not as in-depth of a review as it will be when they are your actual clients and you are
reviewing your own work, it is just to get an estimate of the amount of work this client will be.
Only take about an hour for this because you have not been paid yet (might take longer at first).
For client in video, Ben wouldn’t charge clean-up fee because books were in good condition.
- Open bookkeeping software and do quick look at dashboard for an overview if anything
stands out
- Write questions as you go about things to ask prospect, try to answer yourself if you can
- After quick overview pull balance sheet of prev. month
- Start at top, assets. Check that assets have positive balances (quick look over), look for
unusually high numbers, look for debit balances where it should be credit, vice versa.
- Opening balance equity (qbo only) should be zero
- Check assets=liabilities + equity
- Look at Reconciliation report, when was the last time they reconciled? Shows how much
work you will have.
- Look at uncleared checks and deposits in each account
- Go back to questions and investigate further before asking clients
- Don’t be afraid to ask clients how they got certain numbers
- Determine if questions should be asked to client or accountant
- See if A/P (A/P aging summary) matching General Ledger number
- Look at Sales Tax report to see if they are paying it and how often (monthly/quarterly?)
- See if they are breaking up principle and interest for loans
- Check retained earnings in software to tax return if available to you
- Pull P&L, look at net profit see if it agrees with net income on balance sheet
- Look over income, COGS, expenses for account to stand out
- Make suggestions on things that can make them money or save time (ex. Paying 3%
merchant fee when you know they could be paying 2%, tell them how much they could
save, pay for yourself!)

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