End-to-end procedure for taking on a new audit / review / compilation / AUP / Single Audit / Yellow Book engagement from EL through to start of fieldwork. The audit-specific PBC + planning + materiality + risk assessment workflow is heavier than tax or accounting onboarding.

- New audit client signs EL for a financial-statement audit, review, compilation, AUP, or Single Audit - Existing client adds an audit engagement (single client can have multiple service lines) - Annual recurrence — for recurring audit clients, use this as the year-2+ kickoff (with roll-forward enabled)

- Primary owner: Audit Manager - Engagement Partner: signs EL, signs final report - Senior auditor / staff: assigned to specific workpaper sections - Client: provides PBC items via portal + signs Mgmt Rep Letter

- Engagement type confirmed in EL: GAAS Audit / PCAOB / GAGAS Yellow Book / Single Audit OMB / Review SSARS / Compilation / AUP - Audit fee + payment terms in EL; advance invoice paid before partner countersigns - AI Brain connected (M-022) — at minimum Gemini for materiality/risk assessment - DocuSign connected (M-026) for EL + Mgmt Rep Letter signing

1. Audit engagement created (M-015) at "Accepted" stage of Audit pipeline (default 6 stages: Accepted → Planning → PBC & Setup → Fieldwork → Draft Report → Issued ✓; configurable) 2. Generate engagement letter (AICPA-standard template, customizable in Settings) — AI can draft pre-filled with client name, FYE, engagement type, fee, mutual responsibilities (M-012) 3. Send EL for e-signature — sequential: client signs first, then partner countersigns AFTER advance invoice paid 4. EL countersigned + advance paid → engagement moves to "Planning" stage 5. Click 🤖 AI Materiality (M-015) — calculates Overall Materiality (OM), Performance Materiality (PM = 70% of OM default), Clearly Trivial (CT = 5% of OM); benchmark selection per AU-C 320 (revenue / pre-tax income / asset based) 6. Click 🤖 AI Risk Assessment — identifies significant accounts, key risks, fraud risk factors, inherent/control risk per area (AU-C 315); produces risk matrix table 7. Build Audit Strategy Memorandum from template; partner reviews + approves 8. Engagement moves to "PBC & Setup" stage; configure Requirements tab — 5 sub-tabs: PBC / Inquiries / IC / Fraud / IT (M-016) 9. Default 8-item PBC template loaded (customizable per engagement type); each item gets workpaper cross-reference (e.g. PBC-3 → WP A-1) 10. Click "Post to Client Portal" → bulk-posts all Open items + sends Resend email + push notification to client 11. Client uploads PBC items via portal → status auto-flips to "Received"; firm gets notified 12. Once PBC % complete reaches threshold (firm-defined; typical 80%) → engagement moves to "Fieldwork" stage; staff begins workpapers (SOP-006)

- If GAGAS Yellow Book or Single Audit OMB: additional federal-program testing required; reference OMB Compliance Supplement; engagement uses different audit strategy template - If Review (SSARS AR-C 90) or Compilation: substantially less procedure depth; skip risk assessment matrix; PBC list is shorter - If client refuses PBC items or is significantly late (>30 days overdue): partner-level escalation; consider scope limitation language in report or withdrawal - If materiality requires revision during fieldwork (per AU-C 320.12): revised OM/PM/CT logged on engagement; document rationale

- Multiple invoices per audit (advance + final + extras): final report only released after all dues cleared (M-010) - Multi-entity audit: separate Client records, separate engagements per entity, but consolidated financial statements may roll up — clarify in Planning - Going-concern findings discovered during planning: flag immediately; AU-C 260 requires governance communication BEFORE report issuance - Closed-year audit folders LOCKED from edit/delete after issuance (M-030); subsequent restate/amendment is a NEW engagement

- Time from EL signed → Fieldwork start: target 4-8 weeks (depends on PBC turnaround) - Materiality rationale documented and partner-approved before fieldwork begins - Risk assessment complete with at least 8 areas evaluated (Cash, AR, Revenue, Inventory, Fixed Assets, AP, Payroll, Equity baseline) - PBC fulfillment rate at fieldwork start: >80%

- Modules: M-015 Audit Engagement · M-016 PBC · M-017 Trial Balance · M-018 Workpapers · M-019 Findings · M-026 E-Sign · M-022 AI Brain · M-007 Client Portal - SOPs: SOP-006 (audit engagement execution — fieldwork through report) · SOP-009 (PBC escalation) · SOP-010 (integration setup) · SOP-012 (compliance evidence)

- "Lead schedule auto-population" referenced in module spec (M-018) but flagged as partial implementation — verify before relying on it for the engagement - "Confirmation letters generation" not yet built (audit AI gap) — manual draft for now - Roll-forward (year-2+): prior year audit data pre-filled when new year engagement created — review for accuracy before relying on it - Audit folder structure follows PBC checklist, NOT the Year/Status structure used for accounting clients (M-030)