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Industries/Startups

Audit file prep for venture-backed startups.

Startup books are small, and the equity is complicated. The standard pack ties the books and runs the ledger checks; your reviewer takes the equity and going concern judgments.

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 startup 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

  • Equity rollforward
  • Preferred stock terms
  • Convertible notes and SAFEs
  • Equity awards
  • Revenue and spend tie-out

Typical PBC items from the client

PBC items from the client

  • Cap table and stock ledger
  • Certificate of incorporation and financing agreements
  • SAFE and convertible note documents
  • Equity plan, grant listing and the latest valuation report
  • Bank statements and payroll registers
  • Board minutes and the cash forecast

Where startup files go wrong

Instruments in the wrong section
SAFEs and preferred stock with redemption features carried in equity.
Expense without a valuation
Option expense recorded with no valuation behind it.
Cash runway
A short runway raises going concern questions.

What stays with your firm on startup 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.

GuideVenture-Backed Startup Audits: Preferred Stock Classification, Temporary Equity and Cap TableGuideConvertible Notes and SAFEs: Audit Guide for Startup ClientsGuide409A Valuation Guide for CPAs: Safe Harbors, the 12-Month Rule and What Auditors CheckGuideASC 718 Stock Compensation for Private Companies: Grant-Date Fair Value, Practical Expedients and Audit TestingStandardASC 470-20: ASC 470-20 Convertible Debt After ASU 2020-06: Models, Effective Dates and ASU 2024-04TemplateEquity Rollforward Template (Corporation and LLC)TemplateGoing Concern Evaluation Memo (AU-C 570 / ASC 205-40)ToolGoing Concern Checklist (ASC 205-40 / AU-C 570)ToolBlack-Scholes Calculator for Stock Option Fair Value (ASC 718)

Questions firms ask

No. Valuation is the client’s, supported by its own specialist where used.
Yes. Messy books are included in the flat fee, never a surcharge.
Yes. The file is the same. Your firm issues the report to the company and its investors.
No. CORAA drafts working papers only and never signs, issues or reports on anything.
Your first audit is free. After that, a flat fee per audit, set by entity size. Messy books are included, never a surcharge.

Sources: AICPA Statements on Auditing Standards, currently effective

More in industries
IndustriesSaaS companiesDeferred revenue, contract revenue and capitalized costs: the pack, the PBC list and the judgment areas.IndustriesStaffing firmsGross versus net revenue, payroll liabilities and receivables: the pack, the PBC list and the judgment areas.IndustriesEmployee benefit plansParticipant data, contributions and Form 5500: 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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