codexkit-audit-readiness-checker

# Audit Readiness Checker ## When to Use - 60–90 days before a scheduled external audit - When preparing for SOX compliance for the first time - After prior audit findings need remediation verification - When internal audit wants a pre-flight check ## Procedure ### Step 1 — Map Assertions to Accounts For each material account balance, map the relevant audit assertions: | Assertion | What It Tests | |-----------|--------------| | Existence/Occurrence | Did the transaction/asset actually happen/exist? | | Completeness | Are all transactions recorded? | | Valuation/Accuracy | Are amounts recorded correctly? | | Rights & Obligations | Does the entity own/owe the amounts? | | Presentation & Disclosure | Is it properly classified and disclosed? | | Cut-off | Are transactions in the correct period? | ### Step 2 — Check Evidence Completeness For each assertion per account, verify supporting evidence: 1. Source documents (invoices, contracts, bank statements) 2. Reconciliations (bank, intercompany, sub-ledger to GL) 3. Approvals and authorization records 4. Third-party confirmations 5. Management representations and estimates documentation ### Step 3 — Score Readiness | Score | Criteria | |-------|----------| | 🟢 Green | All evidence available, reconciled, no open items | | 🟡 Amber | Evidence partially available, minor gaps, reconciliation in progress | | 🔴 Red | Missing evidence, unreconciled, prior audit finding unresolved | ### Step 4 — Generate Remediation Plan For each 🟡 and 🔴 item: 1. Describe the gap 2. Assign an owner 3. Set a deadline (must be before audit fieldwork) 4. Define the evidence deliverable ## Inputs | Input | Required | Format | |-------|----------|--------| | Trial balance | Yes | Account list with balances | | Prior audit findings | Recommended | Management letter or audit report | | Audit timeline | Yes | Fieldwork start date | | Supporting schedules | Recommended | Reconciliations, roll-forwards | ## Output ```markdown ## Audit Readiness Scorecard — [Entity] — [Audit Period] ### Overall Score: 🟡 AMBER (72% ready — 12 weeks to fieldwork) ### By Account Area | Account | Assertion | Evidence | Status | Gap | Owner | Deadline | |---------|-----------|----------|--------|-----|-------|----------| | Cash | Existence | Bank confirmations | 🟢 | — | — | — | | Cash | Completeness | Bank reconciliation | 🟢 | — | — | — | | AR | Existence | Confirmations | 🟡 | 3 confirmations pending | AR Lead | Week 8 | | AR | Valuation | Aging + allowance | 🔴 | Allowance model not updated | Controller | Week 6 | | Revenue | Cut-off | Shipping docs | 🟢 | — | — | — | | PP&E | Existence | Physical count | 🔴 | Count not scheduled | Ops Mgr | Week 4 | ### Prior Findings Status | Finding | Year | Status | Remediation | |---------|------|--------|-------------| | Inventory count procedures | 2024 | 🟡 In progress | New SOP drafted, testing pending | | AR confirmation process | 2024 | 🟢 Resolved | Automated via NetSuite | ### Remediation Timeline | Week | Action | Owner | |------|--------|-------| | Week 4 | Schedule PP&E physical count | Ops Manager | | Week 6 | Update AR allowance model | Controller | | Week 8 | Complete AR confirmations | AR Lead | | Week 10 | Final reconciliation review | CFO | | Week 12 | Audit fieldwork begins | — | ``` ## Definition of Done - [ ] All material accounts mapped to audit assertions - [ ] Evidence completeness checked per assertion - [ ] RAG status assigned to every account/assertion combination - [ ] Prior audit findings tracked with remediation status - [ ] Remediation plan with owners and deadlines for all 🟡/🔴 items - [ ] Timeline fits before audit fieldwork start ## Examples ### Prompt ```text Our external audit fieldwork starts in 12 weeks for FY2025. Here is our trial balance: [paste]. Prior year findings: AR confirmation delays, inventory count gaps. Assess our audit readiness and create a remediation plan. ``` ## Quality Criteria - [ ] Every finding is tied to a specific evidence source (log, test, metric) - [ ] Pass/fail criteria are binary and measurable — no subjective judgments - [ ] Severity levels are assigned with clear thresholds - [ ] Remediation steps are provided for all critical and high findings ## Verification (4C) | Check | Question | |-------|----------| | **Correctness** | Are all pass/fail criteria applied against the correct standard or rule? | | **Completeness** | Were all required dimensions or checklist items evaluated? | | **Context-fit** | Does the verification scope match the actual risk level of the deliverable? | | **Consequence** | If this passed verification but had a hidden flaw, what is the worst-case impact? | ## Edge Cases - **Incomplete data for full assessment** — Document which checks were limited and flag for re-verification when data becomes available. - **Ambiguous pass/fail criteria** — Request clarification from the standard owner before scoring. Mark as 'Needs Review'. - **Multiple overlapping standards** — Identify the governing standard and note where others diverge. ## Changelog - v1.0.0 — Initial release