The audit team's procedure from "PBC & Setup" stage through report issuance. Picks up after SOP-003 (audit onboarding) completes planning + materiality + risk assessment; covers fieldwork, workpapers, findings, draft report, partner review, issuance.

- Audit engagement at "PBC & Setup" stage with PBC fulfillment threshold reached - Recurring annual audit at "Fieldwork" stage (year-2+ with roll-forward applied) - Compilation / Review (lighter-touch versions of this same sequence)

- Primary owner: Audit Senior or Manager - Staff auditor: assigned to specific workpaper sections - Audit Manager: reviews each section, signs off - Engagement Partner: final report sign-off, management letter sign-off - Client: signs Mgmt Rep Letter

- Audit engagement at "PBC & Setup" stage (or later) - Materiality calculated + partner-approved (OM, PM = 70% OM default, CT = 5% OM default) - Risk Assessment complete with significant accounts identified (AU-C 315) - Trial Balance imported (M-017) — from QBO/Xero/CSV/manual entry - AI Brain connected (M-022) for AI Workpapers

1. Verify Trial Balance imported and balanced (M-017): Total Debits = Total Credits; FS Group mapping 100% complete (no "unmapped" red warning) 2. Stage 4 — Fieldwork begins; Workpapers tab opens (M-018); workpapers grouped by section A-J (A=Cash, B=AR, C=Revenue, D=Inventory, E=Fixed Assets, F=AP & Accruals, G=Payroll, H=Long-term Debt, I=Equity, J=Commitments) 3. Click 🤖 AI Workpapers (M-018) — generates A-H workpaper templates only when none exist; uses TB + materiality as context; each workpaper has objective, procedures, tick marks, conclusion, AU-C reference 4. For each workpaper, staff: review AI draft → perform actual audit procedures (confirmations, vouching, recalculation, analytical) → tick mark each test → write conclusion paragraph (AICPA template) 5. Cross-reference each workpaper to TB account (via fsGroup match) and PBC items (via wp cross-ref); verify Lead Schedule populated correctly (M-018) 6. Identify findings as procedures surface them; create Finding records (M-019) — classify as Material Weakness (MW) / Significant Deficiency (SD) / Control Deficiency (CD) / Informational 7. Each finding requires AICPA structure: Criteria (standard cited, e.g. AU-C 265.A12) / Effect (dollar impact) / Cause / Recommendation (often includes proposed AJE) 8. Manager reviews each workpaper → sets approved=true; preparedBy stays set to staff name 9. Open AJE entries surfaced from findings → Adjustments tab (M-017); enter AJE → set status to draft → manager approves → Post to QBO via /journalentry endpoint 10. Stage 5 — Draft Report: build draft auditor's report; tag findings to include in management letter via "Add to Mgmt Letter" toggle per finding 11. Click 🤖 AI Audit Report (M-022 case in audit AI route) — drafts auditor's report; partner reviews, edits, finalizes 12. Send Management Representation Letter for client signature (M-026); KBA optional per firm policy 13. Engagement Partner reviews entire engagement: workpapers + findings + report + management letter; sets approved 14. Stage 6 — Issued ✓: report finalized; signed PDF + management letter + certificate of completion archived in audit folder structure (PBC checklist-based per M-030); engagement marked Issued 15. Final invoice cleared (advance + final per M-010); audit binder remains accessible read-only after issuance

- If MW or SD found: AU-C 265 requires written communication to those charged with governance; use management letter; AU-C 260 requires communication BEFORE report issuance - If going-concern doubt arises: AU-C 260 requires governance communication; adjust report opinion language; consider scope of going-concern paragraph - If client disputes a finding: document Management Response = "Disputed"; finding still stands; partner judgment whether to escalate - If sample size insufficient: re-perform with expanded sample; document rationale for sample size change - If revised materiality during fieldwork (per AU-C 320.12): update OM/PM/CT on engagement; re-evaluate procedures performed against revised threshold

- Lead schedule auto-population (M-018): partial implementation per honest status; verify Lead Schedule data is correct before relying on it - Confirmation letters generation: NOT BUILT in audit AI; manual draft for now - Workpaper locking after final assembly (60-day rule per AU-C 230.14): NOT BUILT — manual discipline required - 5-year retention enforcement (AU-C 230.16): NOT explicitly enforced at code level — operational rule - Multi-state engagement (e.g. Yellow Book + Single Audit + standard GAAS): each is a separate engagement type; track separately in module - Closed-year locking: applies after issuance; restate would be NEW engagement

- All workpapers approved before draft report stage - Each workpaper has AU-C reference + tick marks + conclusion - Findings count consistent with audit risk assessment (no gross undercounting) - Time from PBC threshold reached → Issued: target 4-12 weeks (depends on engagement type + complexity) - Management letter sign-off rate within 7 days of partner approval: >85%

- Modules: M-015 Audit Engagement · M-016 PBC · M-017 Trial Balance · M-018 Workpapers · M-019 Findings · M-022 AI Brain · M-026 E-Sign · M-030 Storage · M-010 Billing - SOPs: SOP-003 (audit onboarding — predecessor) · SOP-009 (PBC escalation) · SOP-012 (compliance evidence)

- AU-C 265.A12 cited explicitly in proto for SD findings; canonical reference for severity classification - "Reasonable possibility of material misstatement not prevented/detected" = MW; "less severe than MW but important to governance" = SD; lower-severity = CD; observations not rising to CD = Informational - AI Workpaper output is ONE-SHOT per engagement (only fires if workpapers list empty) — won't blow away existing work - Roll-forward year-2: prior year audit data pre-filled — review for accuracy; verify benchmarks still appropriate