How to organize an external auditor’s PBC request list before fieldwork.
Create a controlled management process for assigning, reviewing, and delivering the information requested by a separate external CPA firm.
A PBC request list—often shorthand for a “prepared by client” list—is the external auditor’s inventory of records, schedules, explanations, and other information requested from management. Although it can look like a document checklist, managing it well is a financial-reporting and project-management exercise.
The objective is not simply to upload files before fieldwork. It is to give the separate external CPA firm clearly labeled, internally reviewed information for the correct entity, period, and request. The external firm determines its procedures, selects items for testing, evaluates the information received, and issues its report. Management remains responsible for company records, financial statements, controls, representations, and decisions. John W. Halloran CPA, P.C. provides Audit Readiness support and does not perform the external audit.
Confirm the scope and operating rules first
Before assigning requests, confirm these basics with the external firm:
- Legal entities and reporting periods covered.
- The applicable reporting framework and expected financial-statement package.
- Fieldwork dates and important interim deadlines.
- The secure portal, file-naming convention, and permitted formats.
- External-firm and company contacts for coordinating questions.
- The meaning of each status used in the request system.
Start with the external firm’s current list, not a prior-year template. Initial engagements may involve opening balances and other considerations that do not appear in a recurring process. Treat the list as live because requests may be added or revised as the external firm’s work progresses. Preserve each original request number and description.
Turn the list into a controlled tracker
If the external firm’s portal does not provide enough management visibility, maintain an internal tracker with one row per request. Useful fields include the request number, entity and period, preparer, reviewer, source-system owner, due date, dependencies, status, submitted file and version, and follow-up.
Use precise statuses: not started, in preparation, under internal review, submitted, follow-up received, and closed. “Submitted” is not “closed”; the external firm may request clarification or additional support.
Assign one company coordinator to maintain the tracker and resolve priorities. Employees can prepare individual items, but one controlled view prevents requests from disappearing into email chains or receiving inconsistent answers.
Organize files around the request
Use a central folder or portal structure that follows request numbers or agreed workstreams. Workstreams may include the trial balance and financial statements; cash and debt; revenue and receivables; payables and expenses; inventory and fixed assets; payroll and taxes; equity and related parties; and contracts, estimates, or subsequent events.
These are organizational aids, not a forecast of procedures. The separate external CPA firm decides what information is required. Name each file with the request number, entity, period, content, and version. When one schedule supports several requests, link to a controlled copy and cross-reference it in the tracker rather than creating several slightly different versions.
Require schedules to pass an internal review
Before submission, each schedule should answer four questions:
- Does it cover the correct entity and period?
- Does it reconcile to the applicable general-ledger or financial-statement balance?
- Are material reconciling items, assumptions, and manual adjustments explained?
- Has an appropriate company reviewer approved it for release?
Include clear headings, dates, units, and source-system details. Check totals and formulas and retain the supporting records. If a balance is preliminary or unresolved, label it accurately and add it to the open-items list. An unsupported balance does not become ready because it appears in a polished spreadsheet. A dependable month-end close process can make this work considerably easier.
Control revisions as well. State what changed, who approved the revision, and which earlier file it replaces. That keeps management and the external firm from working from different numbers.
Manage questions and follow-ups deliberately
Route questions through the designated coordinator and record them in the tracker. A short recurring status meeting can clarify requests, reset priorities, and identify items that depend on third parties or unfinished accounting work.
Do not substitute a different schedule simply because it is easier to produce; ask whether the alternative addresses the request. Management can assemble information for confirmations, but the external firm controls its confirmation process. It also selects samples and decides whether the information provided is sufficient for its work.
Document substantive explanations. A concise written response should identify the request, relevant facts and schedules, and management contact. If new information changes an earlier answer, update the response and preserve the revision history.
Protect sensitive information
Use the external firm’s approved secure portal or another authorized method for bank, payroll, tax, owner, and contractual information. Limit access, confirm permissions before sharing links, and remove obsolete versions from active folders. The Federal Trade Commission’s business-security guidance likewise emphasizes limiting access to sensitive information and transmitting it securely.
Do not redact or omit requested information without discussing it with the external firm. Coordinate legal, privacy, or contractual restrictions with the appropriate counsel or adviser.
Review readiness before fieldwork
Several days before fieldwork, review the tracker with preparers, reviewers, and company leadership. Identify what is complete, what awaits review, what depends on another party, and which accounting issues remain open. Confirm that submitted schedules agree with the latest approved financial information.
The useful measure is not the percentage of files uploaded. It is whether priority requests are supported, reconciled, reviewed, and available when needed.
How John W. Halloran CPA, P.C. can help
We can help management convert the separate external CPA firm’s request list into a controlled tracker, assign responsibilities, organize agreed schedules, reconcile selected accounts, review packages for internal consistency, and coordinate open items. We do not perform external audits, determine the external firm’s procedures, decide whether information is sufficient, or issue its report.
Explore Audit Readiness and our guide to preparing for a company’s first external audit. If the requirement and fieldwork date are known, tell us about your business, the request list, and the timing.
Frequently asked questions
What does PBC mean in an external audit?
PBC commonly means prepared by client. It refers to schedules, records, explanations, and other information management provides in response to a separate external CPA firm's requests.
Must every PBC item be complete before fieldwork begins?
Not necessarily. Management should confirm priorities and dates with the external firm, identify pending items clearly, and avoid labeling incomplete or unreconciled information as final. Critical delays should be raised early.
Can an Audit Readiness adviser communicate with the external CPA firm?
Yes, when management authorizes and defines that role. A readiness adviser may coordinate requests and explain prepared schedules, while management retains its responsibilities and the separate CPA firm controls its procedures, evaluates the information, and issues its report.
Tell us what is changing in your business.
Share your company, priorities, and timing. We review each inquiry and generally respond within one business day with the appropriate next step.