Audit xls

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.

Preflight: Dependency Check

Before starting, verify required libraries are installed and install any that are missing.

python3 -c "import pandas" 2>/dev/null || python3 -m pip install pandas
python3 -c "import openpyxl" 2>/dev/null || python3 -m pip install openpyxl

Important: Do not skip this step — the workflow below will fail without these libraries.

Step 1: Determine scope

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

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 where the 1.05 should be a cell reference
Inconsistent formulas	A formula that breaks the pattern of its neighbors in a row or column
Off-by-one ranges	SUM or AVERAGE that misses the first or last row
Pasted-over formulas	A cell that looks like a formula location but is actually a hardcoded value
Circular references	Intentional or accidental
Broken cross-sheet links	References to cells that moved or were deleted
Unit or scale mismatches	Thousands mixed with millions, or percentages stored as whole numbers
Hidden rows or 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, or custom, then run the appropriate checks.

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 the model's equivalent, applied consistently
Tab flow	Logical order such as 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 for every period
RE rollforward	Prior RE + Net Income - Dividends = Current RE
Goodwill/intangibles	Flow from acquisition assumptions if M&A applies

If the balance sheet does not balance, quantify the gap per period and trace where it breaks. Nothing else matters until that is fixed.

3c. Cash Flow Statement

Check	Test
Cash tie-out	CF Ending Cash = BS Cash for every period
CF sums	CFO + CFI + CFF = Delta 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 for AR, AP, and Inventory

3d. Income Statement

Check	Test
Revenue build	Ties to segment or product detail
Tax	Tax expense = Pre-tax income x tax rate, allowing for deferred tax adjustments
Share count	Ties to dilution schedule: options, converts, buybacks

3e. Circular references

• Interest -> debt balance -> cash -> interest is a common intentional circularity in LBO and 3-statement models.
• If intentional, verify the iteration toggle exists and works.
• If unintentional, trace the loop and flag how to break it.

3f. Logic and reasonableness

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

3g. Model-type-specific bugs

DCF

• Discount rate applied to the 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 when it should be unlevered
• Tax shield double-counted

LBO

• Debt paydown does not match cash sweep mechanics
• PIK interest does not accrue to principal
• Management rollover is not reflected in returns
• Exit multiple applied to the wrong EBITDA period: LTM vs NTM
• Fees or expenses not deducted from Day 1 equity

Merger

• Accretion/dilution uses the wrong share count: pre- vs post-deal
• Synergies not phased in
• Purchase price allocation does not balance
• Foregone interest on cash not included
• Transaction fees not in sources and uses

3-statement

• Working capital changes have the wrong sign
• Depreciation does not match the PP&E schedule
• Debt maturity schedule does not 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 does not balance, formula is broken, or cash does not tie
• Warning — risky: hardcodes, inconsistent formulas, edge-case failures
• Info — style or best-practice items: 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

Do not change anything without asking. Report first, fix on request.

Notes

• BS balance first. If it does not balance, everything downstream is suspect.
• Hardcoded overrides are the number one source of silent bugs. Search aggressively.
• Sign convention errors are extremely common.
• If the model uses VBA macros, note any macro-driven calculations that cannot be audited from formulas alone.