What Is a PBC List for a Financial Audit?

Understanding the PBC List

A Prepared By Client (PBC) list is a document auditors or accountants provide to their clients when conducting financial engagements. The term “PBC” itself signifies that the information requested on the list is to be prepared or gathered by the client organization. This list serves as a systematic guide, outlining all the specific documents, data, and explanations the audit team requires to perform their work effectively. Its primary purpose is to streamline the information-gathering process, ensuring that both the client and the auditor operate with efficiency.

The audit or accounting firm typically prepares this comprehensive list, tailoring it to the specific scope and nature of the engagement. It acts as a clear communication tool, preventing misunderstandings about what information is needed. The client’s management and accounting personnel are then responsible for diligently gathering and organizing all the items detailed on the PBC list. This organized approach helps reduce back-and-forth communication and accelerate the overall timeline of the financial examination.

Key Information Requested

A PBC list commonly requests a wide array of financial and operational documents to support the balances and transactions reported in an organization’s financial statements. Auditors often ask for detailed general ledger activity for the entire period under review, providing a granular view of all financial transactions. Bank statements and reconciliations for all cash accounts are consistently requested to confirm cash balances and verify transactions. Payroll records, including detailed registers, tax filings, and related supporting documentation, are also routinely part of the request to validate compensation expenses and withholdings.

Further typical requests include aged accounts receivable and accounts payable listings, which provide insight into outstanding customer invoices and vendor obligations. Fixed asset registers, detailing acquisitions, disposals, and depreciation for the period, are necessary to verify property, plant, and equipment balances. Beyond numerical data, the list often includes copies of significant contracts, such as loan agreements, lease contracts, and material sales agreements, to understand the terms and conditions impacting financial reporting. Legal correspondence, board of directors’ meeting minutes, and prior year financial statements are also frequently requested to provide context and support for various financial disclosures and operational decisions.

The Process of Using a PBC List

Auditors typically provide the PBC list to the client well in advance of the scheduled start date for the financial engagement. This early provision allows the client ample time to gather and organize the necessary documentation. Once received, the client’s accounting department or designated personnel begin systematically collecting each item specified on the list. This involves retrieving digital files, scanning physical documents, and preparing various financial reports from their accounting systems.

As each item is prepared or located, it is common for the client to check it off the PBC list, treating the document as a comprehensive checklist. This methodical approach helps ensure that no required information is overlooked before the audit team arrives or begins their remote procedures. The compiled documents and data are then provided to the audit team through a secure online portal or a shared drive, facilitating a smooth transfer of information. The PBC list serves as a roadmap for both parties, guiding the information exchange and allowing the audit to proceed efficiently, minimizing disruptions to their daily operations.