audit-xls

SKILL.md

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
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