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!

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VALUE!

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N/A

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DIV/0!

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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