Intro: Year-end is a month-end close plus the work your auditor, your tax adviser and your board need for the full year. This checklist sets out the steps in order, who usually owns each one and the evidence to keep, so the PBC list arrives to a folder that is already built. Adapt owners, dates and thresholds to your own policies. It is a working aid, not audit or tax advice.
What is a year-end close?
Short answer: A year-end close is the final month-end close of the fiscal year, plus annual work: full-year reconciliations, true-ups, cut-off testing, fixed asset and inventory counts, equity and debt rollforwards, tax provision inputs and the audit PBC list. It ends when the books are locked and the auditor has what they need.
When should each step happen?
| Timing | Step | Typical owner | Evidence to keep |
|---|---|---|---|
| Nov (T-6 weeks) | Agree the year-end calendar and PBC due dates with the auditor | Controller | Signed calendar; auditor's PBC list |
| Nov | Clear aged reconciling items over 60 days | Senior accountant | Item list with resolution |
| Nov | Review the fixed asset register; schedule any physical counts | Controller / ops | Count sheets; register |
| Dec (T-2 weeks) | Confirm cut-off procedures for revenue, AP and inventory | Controller | Cut-off memo |
| Dec | Send bank, debt and legal confirmations if the auditor asks you to | Controller | Confirmation log |
| Year-end + BD1-3 | Run the normal month-end close (reconciliations, accruals, flux) | Close team | Reconciliations with support |
| BD3-5 | Full-year true-ups: bonus, commissions, vacation, deferred revenue, prepaids | Senior accountant | Calculations tied to source |
| BD5-7 | Rollforwards: fixed assets, debt, equity, deferred revenue, leases | Senior accountant | Rollforward with opening tied to prior-year audited balances |
| BD5-7 | Search for unrecorded liabilities: payments after year-end | AP lead | Subsequent payments list |
| BD7-10 | Tax provision inputs to your tax adviser | Controller | Trial balance, book-tax adjustments list |
| BD10 | Full-year flux vs prior year and budget, with explanations | Controller | Flux with driver transactions |
| BD10-12 | Lock the period; produce the year-end trial balance | Controller | Locked TB; sign-off record |
| BD12+ | Assemble PBC items; hand over the evidence index | Controller | PBC tracker |
What does the auditor's PBC list usually ask for?
Short answer: A PBC (prepared by client) list usually asks for the year-end trial balance, reconciliations for every balance sheet account, rollforwards, AR and AP agings tied to the GL, a revenue schedule, a fixed asset register, debt agreements and schedules, equity records, board minutes and journal entry listings. Your auditor sets the actual list.
| PBC item | Ready when |
|---|---|
| Year-end trial balance | Locked, agrees to the financial statements |
| Bank reconciliations (all accounts) | Tie to $0.00, with outstanding items listed and aged |
| Balance sheet reconciliations | Each account tied to an independent source; preparer and reviewer signed |
| AR and AP agings | Totals agree to control accounts |
| Rollforwards (fixed assets, debt, equity, deferred revenue) | Opening agrees to prior-year audited balances |
| Journal entry listing | Complete population with preparer and approver |
| Revenue detail | Reconciles to billing and recognized revenue |
What makes a reconciliation "auditor-ready"?
It ties to an independent source, every reconciling item is specific and aged, the preparer and reviewer are different people with dates, and the auditor can reproduce the balance. If the balance came from a saved query, they can rerun it. If it came from a spreadsheet, they'll want the spreadsheet and its inputs.
Where do year-end closes usually slip?
| Slip | Prevention |
|---|---|
| Aged reconciling items discovered in fieldwork | Clear them in November |
| Rollforward openings don't agree to the prior-year audit | Tie openings first, before any activity |
| Late true-ups after the TB was sent | Lock the TB only after true-ups are approved |
| PBC items rebuilt from scratch | Keep an evidence index all year |
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