What it is
In a contractor audit the estimate at completion drives profit. A small change in the estimated cost to finish a job moves revenue and gross profit in the period.
The program covers the WIP schedule, estimates at completion, job cost and cutoff, change orders and claims, and presentation of contract assets and liabilities.
When to use it
- General and specialty contractors that recognize revenue over time.
- Contractors with fade in gross profit or high backlog.
- When bonding or lenders rely on the financial statements.
What’s inside
- WIP schedule recomputation and job selection procedures
- Estimate to complete, fade analysis and loss contract tests
- Job cost, cutoff and subcontractor accrual tests
- Change order, claim, backlog and disclosure procedures
Standard cited
This template follows ASC 606 / AU-C 330, 540. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
Which progress method does it assume?
An input method such as cost to cost (606-10-55-20), with attention to inputs that do not depict transfer of control (606-10-55-21). Output methods need their own procedures.
Is there a cutoff schedule?
Yes. The job cost cutoff and accrual test shows the effect on percent complete, revenue and gross profit.
Related templates
- Audit Program: Construction Contractor
- Construction Contractor Audit Checklist
- Construction WIP Schedule (Over / Under Billings)
- Construction Job Cost Cutoff and Accrual Test
Last updated 11/06/2026. All free templates.