What is a PBC List and How Can It Help an Audit?
By Nicole Loux, CPA
Some of you might be wondering what exactly is a PBC list and its’ purpose. A PBC list, also known as a Provided by Client (PBC) list is a request of information and supporting documents that will be needed to complete your audit engagement. These types of lists are primarily used in the audit world and may include items such as policies and procedures, schedules, debt agreements, reports and system generated reports. It is important to remember that additional items may be requested in addition to those already on the PBC lists.
For an audit engagement, you will probably receive two different PBC requests: One that requests information needed to complete the planning for the audit engagement and the second one requests information needed to complete the audit fieldwork.
The planning PBC list is typically shorter requesting only the information needed to complete planning, which typically includes interim financial statements, board minutes, and copies of any debt agreements that were instituted during the year. The fieldwork PBC list is longer as the auditor try to include most of the items needed to complete the engagement. Such items on this list could include the year-end financials, reconciliations and supporting documents. Here are some helpful tips to manage the PBC lists:
- Work with the auditor to set realistic deadlines to ensure progress is made together.
- Prioritize the list. The auditor may have done this for you already, however, if not reach out to see which items are the higher priority items. We would encourage you to start with those items first.
- Gain an understanding of how the documents should be provided to the auditors. Hard copy or electronic; emailed vs. uploaded to a website.
- Break the PBC list down by sections.
- Enlist the help of fellow co-workers to help pull together the requested information.
We all know even with the best of intentions and a realistic deadline that sometimes uncontrollable things come up that will change the course of the original plan. Here are some ideas of what to do when you fall behind on the PBC items and do not believe you will be able to meet the deadline established:
- Do not panic.
- Reach out to the auditor and let them know the status of the requested items.
- Work with the auditor to determine if there is still time to get the request information prepared before the scheduled audit. If not, consider moving the audit, but, remember to be flexible as the auditor will be trying to work around many different schedules.
You may be wondering what benefits will be gained by prepared PBC lists by deadline before the auditors arrive. Here are some benefits that you and your company could see:
- Less stress by having the documents prepared and supplied by the deadline and as a result the week of the audit will be more effective as you can focus on requests made during the audit.
- Satisfaction of meeting deadlines and staying on track.
- Reduction of the amount of time an auditor spends auditing your company.
- With the reduction of time spent typically means the reduction of fees for the audit engagement.
- Growth in the relationship with your auditor from establishing and following the efficient process.
Nicole Loux, CPA | Manager