Audit Spreadsheet

Audit formulas and data for accuracy and mistakes. Scope determines depth — from quick formula checks on a selection up to full financial-model integrity audits.

Step 1: Determine scope

If the user already gave a scope, use it. Otherwise ask them:

What scope do you want me to audit?

selection — just the currently selected range

sheet — the current active sheet only

model — the whole workbook, including financial-model integrity checks (BS balance, cash tie-out, roll-forwards, logic sanity)

The model scope is the deepest — use it for DCF, LBO, 3-statement, merger, comps, or any integrated financial model before sending to a client or IC.

Step 2: Formula-level checks (ALL scopes)

Run these regardless of scope:

| Check | What to look for | |---|---| | Formula errors | #REF!, #VALUE!, #N/A, #DIV/0!, #NAME? | | Hardcodes inside formulas | =A1*1.05 — the 1.05 should be a cell reference | | Inconsistent formulas | A formula that breaks the pattern of its neighbors in a row/column | | Off-by-one ranges | SUM/AVERAGE that misses the first or last row | | Pasted-over formulas | Cell that looks like a formula but is actually a hardcoded value | | Circular references | Intentional or accidental | | Broken cross-sheet links | References to cells that moved or were deleted | | Unit/scale mismatches | Thousands mixed with millions, % stored as whole numbers | | Hidden rows/tabs | Could contain overrides or stale calculations |

Step 3: Model-integrity checks (MODEL scope only)

If scope is model, identify the model type (DCF / LBO / 3-statement / merger / comps / custom) and run the appropriate integrity checks below.

3a. Structural review

| Check | What to look for | |---|---| | Input/formula separation | Are inputs clearly separated from calculations? | | Color convention | Blue=input, black=formula, green=link — or whatever the model uses, applied consistently? | | Tab flow | Logical order (Assumptions → IS → BS → CF → Valuation)? | | Date headers | Consistent across all tabs? | | Units | Consistent (thousands vs millions vs actuals)? |

3b. Balance Sheet

| Check | Test | |---|---| | BS balances | Total Assets = Total Liabilities + Equity (every period) | | RE rollforward | Prior RE + Net Income − Dividends = Current RE | | Goodwill/intangibles | Flow from acquisition assumptions (if M&A) |

If BS doesn't balance, quantify the gap per period and trace where it breaks — nothing else matters until this is fixed.

3c. Cash Flow Statement

| Check | Test | |---|---| | Cash tie-out | CF Ending Cash = BS Cash (every period) | | CF sums | CFO + CFI + CFF = Δ Cash | | D&A match | D&A on CF = D&A on IS | | CapEx match | CapEx on CF matches PP&E rollforward on BS | | WC changes | Signs match BS movements (ΔAR, ΔAP, ΔInventory) |

3d. Income Statement

| Check | Test | |---|---| | Revenue build | Ties to segment/product detail | | Tax | Tax expense = Pre-tax income × tax rate (allow for deferred tax adj) | | Share count | Ties to dilution schedule (options, converts, buybacks) |

3e. Circular references

Interest → debt balance → cash → interest is a common intentional circ in LBO/3-stmt models
If intentional: verify iteration toggle exists and works
If unintentional: trace the loop and flag how to break it

3f. Logic & reasonableness

| Check | Flag if | |---|---| | Growth rates | >100% revenue growth without explanation | | Margins | Outside industry norms | | Terminal value dominance | TV > ~75% of DCF EV (yellow flag) | | Hockey-stick | Projections ramp unrealistically in out-years | | Compounding | EBITDA compounds to absurd $ by Year 10 | | Edge cases | Model breaks at 0% or negative growth, negative EBITDA, leverage goes negative |

3g. Model-type-specific bugs

DCF:

Discount rate applied to wrong period (mid-year vs end-of-year)
Terminal value not discounted back
WACC uses book values instead of market values
FCF includes interest expense (should be unlevered)
Tax shield double-counted

LBO:

Debt paydown doesn't match cash sweep mechanics
PIK interest not accruing to principal
Management rollover not reflected in returns
Exit multiple applied to wrong EBITDA (LTM vs NTM)
Fees/expenses not deducted from Day 1 equity

Merger:

Accretion/dilution uses wrong share count (pre- vs post-deal)
Synergies not phased in
Purchase price allocation doesn't balance
Foregone interest on cash not included
Transaction fees not in sources & uses

3-statement:

Working capital changes have wrong sign
Depreciation doesn't match PP&E schedule
Debt maturity schedule doesn't match principal payments
Dividends exceed net income without explanation

Step 4: Report

Output a findings table:

| # | Sheet | Cell/Range | Severity | Category | Issue | Suggested Fix | |---|---|---|---|---|---|---|

Severity:

Critical — wrong output (BS doesn't balance, formula broken, cash doesn't tie)
Warning — risky (hardcodes, inconsistent formulas, edge-case failures)
Info — style/best-practice (color coding, layout, naming)

For model scope, prepend a summary line:

Model type: [DCF/LBO/3-stmt/...] — Overall: [Clean / Minor Issues / Major Issues] — [N] critical, [N] warnings, [N] info

Don't change anything without asking — report first, fix on request.

Notes

BS balance first — if it doesn't balance, everything downstream is suspect
Hardcoded overrides are the #1 source of silent bugs — search aggressively
Sign convention errors (positive vs negative for cash outflows) are extremely common
If the model uses VBA macros, note any macro-driven calculations that can't be audited from formulas alone