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

## 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 | — |