What it is
Equity is small in transaction count and large in consequence. A missed issuance, an unsupported share value or a wrong vesting period changes net income and the cap table.
The program covers authorization and share counts, share-based awards (inputs, vesting, forfeitures, modifications), classification of warrants and redeemable shares, dividends and disclosures.
When to use it
- Venture-backed and closely held companies with option plans.
- Entities with warrants, convertible instruments or redemption rights.
- Audits where equity activity is significant.
What’s inside
- Authorization, share count and rollforward procedures
- Fair value inputs, vesting and forfeiture tests
- Classification of warrants and redeemable shares
- Dividend, earnings per share and note disclosure procedures
Standard cited
This template follows ASC 718 / 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
How does it treat forfeitures?
ASC 718 lets an entity elect, as an entity-wide policy, to estimate expected forfeitures or account for them as they occur (718-10-35-3). The program tests the election and its application.
Is there a calculator?
Yes. The graded vesting expense schedule and the option and warrant rollforward cover the numbers.
Related templates
- Audit Program: Debt and Equity
- Disclosure Checklist: Stock Compensation (ASC 718)
- Stock-Based Compensation Expense Schedule (Graded Vesting)
- Stock Option and Warrant Activity Rollforward
Last updated 11/06/2026. All free templates.