What it is
Restaurants run on cash, cards and perishable inventory, so the main audit risk is whether all sales were recorded and deposited. The checklist ties point-of-sale reports to deposits and processor statements, and looks at voids, comps and discounts by employee.
It then covers the areas that are particular to the industry: gift card liability and breakage, delivery platform revenue, tip payroll, percentage rent leases and impairment of individual locations.
When to use it
- Planning an audit for a single restaurant or a multi-unit group.
- When delivery platforms or gift cards have grown as a share of revenue.
- To document location-level impairment and lease testing.
What’s inside
- POS, deposit and processor testing
- Gift cards, loyalty and franchise revenue under ASC 606
- Inventory counts and cost of sales analytics
- Tip and hourly payroll tests
- Leases, pre-opening costs, impairment and closures
Standard cited
This template follows AU-C 330 / ASC 606 / ASC 842. 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 is gift card breakage recognized?
If the entity expects to be entitled to breakage and is not required to remit it to a state, it is recognized in proportion to the pattern of redemption by the customer (ASC 606-10-55-46 to 55-49). State unclaimed property law can change the answer, so ask counsel.
Is delivery platform revenue gross or net?
It depends on who controls the food before it goes to the customer and who is the principal for delivery. Read the platform agreement and apply the principal versus agent guidance in ASC 606-10-55-36.
When is a restaurant tested for impairment?
When indicators exist, such as sustained negative cash flow, a closure plan or a significant change in use. Test at the location level using undiscounted cash flows first (ASC 360-10-35).
Related templates
- Audit Program: Inventory
- Payroll Audit Checklist
- Inventory Observation Memo and Test Count Sheet (AU-C 501)
Last updated 11/05/2026. All free templates.