audit-xls

Audit Spreadsheet

Audit formulas and data for accuracy and mistakes. Scope determines depth — from quick formula checks on a selection up to full financial-model integrity audits.

Step 1: Determine scope

If the user already gave a scope, use it. Otherwise ask them:

What scope do you want me to audit?

• selection — just the currently selected range
• sheet — the current active sheet only
• model — the whole workbook, including financial-model integrity checks (BS balance, cash tie-out, roll-forwards, logic sanity)

The model scope is the deepest — use it for DCF, LBO, 3-statement, merger, comps, or any integrated financial model before sending to a client or IC.

Step 2: Formula-level checks (ALL scopes)

Run these regardless of scope:

Step 3: Model-integrity checks (MODEL scope only)

If scope is model, identify the model type (DCF / LBO / 3-statement / merger / comps / custom) and run the appropriate integrity checks below.

3a. Structural review

3b. Balance Sheet

If BS doesn't balance, quantify the gap per period and trace where it breaks — nothing else matters until this is fixed.

3c. Cash Flow Statement

3d. Income Statement

3e. Circular references

• Interest → debt balance → cash → interest is a common intentional circ in LBO/3-stmt models
• If intentional: verify iteration toggle exists and works
• If unintentional: trace the loop and flag how to break it

3f. Logic & reasonableness

3g. Model-type-specific bugs

DCF:

• Discount rate applied to wrong period (mid-year vs end-of-year)
• Terminal value not discounted back
• WACC uses book values instead of market values
• FCF includes interest expense (should be unlevered)
• Tax shield double-counted

LBO:

• Debt paydown doesn't match cash sweep mechanics
• PIK interest not accruing to principal
• Management rollover not reflected in returns
• Exit multiple applied to wrong EBITDA (LTM vs NTM)
• Fees/expenses not deducted from Day 1 equity

Merger:

• Accretion/dilution uses wrong share count (pre- vs post-deal)
• Synergies not phased in
• Purchase price allocation doesn't balance
• Foregone interest on cash not included
• Transaction fees not in sources & uses

3-statement:

• Working capital changes have wrong sign
• Depreciation doesn't match PP&E schedule
• Debt maturity schedule doesn't match principal payments
• Dividends exceed net income without explanation

Step 4: Report

Output a findings table:

Severity:

• Critical — wrong output (BS doesn't balance, formula broken, cash doesn't tie)
• Warning — risky (hardcodes, inconsistent formulas, edge-case failures)
• Info — style/best-practice (color coding, layout, naming)

For model scope, prepend a summary line:

Model type: [DCF/LBO/3-stmt/...] — Overall: [Clean / Minor Issues / Major Issues] — [N] critical, [N] warnings, [N] info

Don't change anything without asking — report first, fix on request.

Notes

• BS balance first — if it doesn't balance, everything downstream is suspect
• Hardcoded overrides are the #1 source of silent bugs — search aggressively
• Sign convention errors (positive vs negative for cash outflows) are extremely common
• If the model uses VBA macros, note any macro-driven calculations that can't be audited from formulas alone