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Industries/Staffing

Audit file prep for staffing firms.

A staffing firm’s file is payroll in, invoices out. The standard pack ties the books and flags cutoff and duplicate payments; your reviewer concludes on gross or net presentation.

What every file gets

The pack is the same on every file, in every industry. It is built from the client’s QuickBooks books and the documents your firm sends.

Lead schedules
Every trial balance account classified to a US GAAP line, in Excel and PDF, with prior-year final, per-books, adjustment and final columns.
Tie-out of the draft
The client’s draft statements re-added and every line agreed to the trial balance. Differences are findings about the draft, never silent changes to the books.
Fixed-rule ledger checks
Revenue cutoff, duplicate payments, journal entry testing, split purchases, opening balances, flux analysis, bank reconciliation and more. Each finding names its rule.
Proposed entries
A finding cites the evidence line and the standard, and proposes an adjusting entry. Nothing is posted to the books.
Review trail
A reviewer decides each finding and records a reason. Initials and dates travel with the working papers.
Inputs received and missing
The file shows what arrived and what did not, tied to the findings that need it.

Where the judgment sits on a staffing file

These areas decide the file. Industry-specific schedules are not part of the standard pack. Whether CORAA drafts any of them for a given file is agreed on the intake call before anything is uploaded, and what is not agreed stays with your team.

Areas your team will spend its time on

  • Revenue presentation support
  • Payroll tie-out
  • Payroll liabilities
  • Receivables and allowance

Typical PBC items from the client

PBC items from the client

  • Payroll registers and payroll tax returns
  • Billing reports by customer and worker type
  • Customer contracts and master service agreements
  • Workers’ compensation and benefit invoices
  • Receivable aging and credit memo listing
  • Line of credit agreement and borrowing base reports

Where staffing files go wrong

Principal versus agent
Revenue grossed up when the firm acts as agent, or netted when it acts as principal.
Payroll liabilities not paid
Payroll taxes withheld but not deposited.
Unbilled time
Hours worked at year end and billed after.

What stays with your firm on staffing files

Fulfilled by CORAA means CORAA AI drafts the file and CORAA Network reviewers clear every flag, with a line-by-line review log. Your manager and partner then review it as they would any staff-prepared file. Your firm keeps the client, the engagement letter, the professional judgment and the signature.

CORAA never signs, issues or reports on anything, and never contacts your client unless you ask us to. Your first audit is free, so you can judge the pack on a real file. After that the fee is flat, set by entity size, and messy books are included.

Free resources for this work

Guides, templates and calculators on this site that cover the same ground. All free to use.

GuideStaffing Firm Audit Guide: Gross vs Net Revenue and Payroll LiabilitiesGuideGross vs Net Revenue Under ASC 606: Principal vs Agent Considerations With ExamplesGuideWorker Classification: Employee or Independent Contractor for Small Business ClientsTemplatePayroll Tax Reconciliation (Form 941 to GL)TemplatePayroll Testing WorkpaperTemplateAudit Program: PayrollTemplateAccounts Receivable Aging and Allowance WorkpaperToolPayroll Anomaly Finder: Ghost Employee and Duplicate Pay Tests from CSV

Questions firms ask

No. The conclusion under ASC 606 is your reviewer’s.
Presentation questions for the entity are your firm’s to conclude. Whether a PEO file fits is settled on the intake call.
The ledger checks, such as journal entry testing and duplicate payments, run over every ledger line. The sampling approach for payroll testing and the conclusion are your reviewer’s.
Where the client uses a service organization, the report is a PBC item and your team reads it. The service organization review checklist on this site covers the steps.
Your first audit is free. After that, a flat fee per audit, set by entity size. Messy books are included, never a surcharge.

Sources: FASB ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

More in industries
IndustriesHealthcare practicesPatient revenue, contractual adjustments and receivables: the pack, the PBC list and the judgment areas.IndustriesSaaS companiesDeferred revenue, contract revenue and capitalized costs: the pack, the PBC list and the judgment areas.IndustriesManufacturersInventory costing, reserves and cutoff: the pack, the PBC list and the judgment areas.
For US CPA firms

Join the CORAA waitlist

CORAA AI drafts audit working papers from your client’s QuickBooks books and does the first pass: lead schedules, tie-out, memos, draft notes and letters. CORAA Network reviewers clear every finding. Your firm reviews and signs.

  • First audit free, so you can judge the quality on a real file
  • Flat fee by entity size; messy books included
  • We work only with CPA firms, never their clients
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