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