Understanding the basics: PBC request lists 101

Nov 29, 2020 11:57:49 AM | 22 min read

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Whether you’re new to the industry or a grizzled audit veteran, it’s always a good time to ensure you’ve mastered the basics. In this case, we’re throwing it waaaaay back to help you find answers to the fundamental questions about PBC lists.

What is an audit PBC list?

An audit request list, or a provided by client list (PBC list), is a list of items an auditor will need to perform an audit. The required items tend to be dynamic, meaning the auditor will usually need to change, add, or edit the number and type of documents required as the audit progresses.

Which items will be included in a PBC list?

Unfortunately, there’s no one right answer. The items included in a PBC list vary by the type of audit and business. However, it’s pretty safe to say that requests will almost always include balance sheet accounts, revenue and expenses, and then cash flow. But PBC lists can also include everything from current loan information to contractual obligations; basically anything that has a material impact on your company's finances may be needed.

Why use a PBC list?

Using a PBC list makes your life and your auditor's life a lot simpler. Having documents prepared beforehand drastically decreases the amount of time an auditor has to spend auditing your company. The less time an auditor spends auditing you, the less the audit costs you.

Firms that implement technology—to gather and deliver client data—are the firms that will thrive through difficult times. There are a number of reasons technology will be so critical moving forward. 

First, the general consensus is that the market, industry, and business won’t go back to the way things were—either in terms of the way we work or where we work. In terms of the way firms work, there will be constant pressure to increase efficiency in a competitive economic climate. As bottlenecks to efficiency are identified, smart firms will immediately look for solutions to alleviate those bottlenecks, and a majority of the time, technology will be the answer. 

Secondly, technology adoption will be a leading indicator of success for firms. Beyond the efficiency gains, a commitment to new technology shows a firm’s mindset. Is your firm committed to growth and innovation, or is it more interested in maintaining the status quo? 

Finally, the technology is worth the investment. In a recent article from Boomer Consulting, Amanda Wilkie said: 

Using a PBC list makes your life a lot simpler—and cheaper. The less time an auditor spends auditing you, the less the audit costs.

How are PBC lists formatted?

The most common format is for list items to be organized and tracked using a Microsoft Excel or Google spreadsheet. Other methods include basic email lists, Microsoft Word docs, proprietary software or methods developed by the CPA firm, or a third-party solution such as Suralink.