Snap Accounting — Audit Pipeline Map

Snap Today

Snap Roadmap

Judgment-Heavy

Standard Audit Procedure

The five phases at a glance.

A standard private company audit moves left-to-right through these five phases over 6–12 weeks. Bar widths are proportionate to typical share of total engagement hours. Brand-red slivers mark Snap's footprint today — the testing execution inside tests of controls and journal entry testing (Phase 02) and expense testing / ToD (Phase 03). Amber slivers mark the roadmap through Q4 ′27: revenue, cash, fixed assets, payroll, debt, equity, reconciliations, confirmations, analytics, and tie-out work. Judgment-heavy procedures (inventory, leases, taxes, going concern, opinion) remain with the auditor throughout.

12%

55%

17%

PHASE 01

Planning

Roadmap: WP roll-forward

PHASE 02

Interim Fieldwork

Snap: ToC + JE testing

Roadmap: walkthroughs, IC docs, analytics

PHASE 03

Substantive Fieldwork

Snap: expense testing (ToD) only

Roadmap: 9 procedures by Q4 ′27

PHASE 04

Completion

Roadmap: tie-out + final analytics

PHASE 05

Reporting

Engagement start Engagement end

PHASE 01

Pre-engagement & Planning

10–15% of total hours

Judgment Client acceptance Independence checks, ethics, conflict screening.

Judgment Risk assessment Identifying material misstatement risks. Walkthroughs of revenue, expenditure, payroll cycles.

Judgment Materiality calculation Overall, performance, and clearly trivial thresholds.

Engagement letter Scope, fees, timing, responsibilities.

Audit strategy & program Planning memo, scope statement, audit program.

PBC list preparation Document request list to client.

Team scheduling Assigning staff/seniors/managers/partner; timeline.

Q1 ′27 Roll forward prior-year WPs Update last year's audit file as starting point.

PHASE 02

Interim Fieldwork & Risk Procedures

10–15% of total hours

Q4 ′26 Walkthroughs Trace transactions through key cycles.

Q4 ′26 Internal control documentation Narratives and flowcharts for key controls.

Snap now Tests of controls Snap performs the actual testing. Auditor handles walkthroughs, sampling, PBCs, follow-up, write-up.

Q4 ′27 Preliminary analytics Trial balance vs. prior-year fluctuations.

Snap now Journal entry testing Unusual entries, period-end, manual JEs (AS 2401). Snap performs the testing; auditor owns risk criteria and follow-up.

PHASE 03

Substantive Fieldwork

50–60% of total hours

Snap now Expense testing (ToD) Sample vouching, tickmarks, exceptions. AP & expenses cycle.

Q3 ′26 Revenue / A/R testing Highest-value cycle. ASC 606, confirmations, cut-off.

Q2 ′27 Reconciliations & tie-outs Bank recs, AR aging, FA roll-forwards.

Q3 ′27 Lead schedule generation One-pagers per balance sheet area.

Q4 ′27 Confirmation management Bank, AR, legal — draft, send, track, follow up.

Q2 ′27 Cash testing Bank confirmations, recs, cut-off, unrecorded accts.

Judgment Inventory observation Physical count, valuation, obsolescence review.

Q2 ′27 Fixed assets / PP&E Additions, disposals, depreciation, impairment.

Judgment Leases (ASC 842) Classification, ROU asset, lease liability, discount rate, modifications.

Q3 ′27 Debt / notes payable Confirmations, covenant compliance, interest recalc.

Q3 ′27 Equity Stock issuances, options, dividends, roll-forward.

Q2 ′27 Payroll Run testing, headcount, PTO/bonus accruals.

Judgment Income taxes Provision review, deferred tax, return-to-provision.

PHASE 04

Completion & Wrap-Up

15–20% of total hours

Judgment Going concern assessment Substantial doubt evaluation for 12 months.

Judgment Subsequent events review Events between YE and report date.

Judgment Legal letter analysis Pending litigation evaluation.

Management rep letter Signed letter from management asserting facts.

Q4 ′27 Final analytical procedures Last review for anything unusual before sign-off.

FS drafting / review FS and footnotes prepared by management or firm.

Q3 ′27 FS tying-out Every FS number traces to a workpaper.

Summary of audit differences Identified misstatements, corrected and uncorrected.

Judgment Review notes resolution Multi-level workpaper review chain.

Judgment EQCR Engagement Quality Control Review by 2nd partner.

PHASE 05

Reporting & Follow-Up

5–10% of total hours

Judgment Audit opinion drafting Unqualified, qualified, adverse, disclaimer.

Judgment Partner sign-off Legal & professional accountability.

Management letter Internal control deficiencies, recommendations.

Audit committee presentation Board-level communication for larger privates.

Final archiving 14-day documentation completion (AS 1215).

Who does what.

A typical $100K private company audit runs ~920 hours across 4 roles. The bars show share of audit hours; the brand-red overlay on the Staff row shows what Snap currently addresses.

Staff / Associate

0–2 yrs · ~480 hrs

52% of hours

Snap today

Loaded cost

$52/hr

Senior / In-Charge

2–5 yrs · ~259 hrs

28% of hours

Loaded cost

$87/hr

Manager

5–8 yrs · ~108 hrs

12% of hours

Loaded cost

$135/hr

Partner

10+ yrs · ~74 hrs

8% of hours

Loaded cost

$225/hr

Hours and rates are illustrative of a typical SMB audit firm engagement.

Hours don't pay bills. Dollars do.

A $100K audit carries ~$78K in labor cost at typical 20–22% margins. Snap addresses staff-level work — the cheapest hour in the audit — and saves only the portion of staff time spent on actual testing (not parameter design, sampling, PBC management, or write-up).

Staff

480

$52

$24,960

32%

Senior

259

$87

$22,533

29%

Manager

108

$135

$14,580

19%

Partner

$225

$16,650

21%

Total Labor

~921

—

$78,723

100%

Audit Fee

—

$100,000

+22% margin

Snap saves (today)

33–65

$52

$1.7K–$3.4K

2–4%

Snap today addresses

2–4%

of total labor $ per audit

Snap performs the testing within ToD, Tests of Controls, and journal entry testing — roughly 33–65 staff hours per audit. The auditor still owns parameter design, sampling, PBC management, exception follow-up, and conclusion write-up (3–6 hrs that stay with the auditor per procedure).

18-month roadmap target

25–40%

Expanding across revenue, cash, fixed assets, payroll, debt, equity, reconciliations, confirmations, analytics, and tie-out work — where senior-level hours come into play and the labor $ multiplier compounds.

From wedge to platform.

Each expansion stage compounds: more procedures, more senior-level hours captured, more labor dollars addressable per audit.

Today

2–4%

labor $ addressable

Expense testing (ToD)
Tests of Controls
Journal entry testing

Snap performs the testing inside three staff-level procedures. Adjacent work (sampling, PBC, follow-up, write-up) stays with the auditor.

Q3 ′26

8–13%

labor $ addressable

+ Revenue / A/R testing
+ Sampling assistance

Highest-risk cycle in the audit. Touches senior-level work — the labor $ multiplier begins to compound.

Q4 ′26 → Q1 ′27

10–16%

labor $ addressable

+ Walkthroughs
+ Internal control documentation
+ Prior-year WP roll-forward

Extends Snap upstream into risk procedures — documenting the cycles and controls that feed the testing Snap already performs.

Q2 ′27

16–26%

labor $ addressable

+ Reconciliations & tie-outs
+ Cash testing
+ Fixed assets / PP&E
+ Payroll

Snap moves across the balance sheet — the staff-heavy substantive areas that fill the middle of every audit.

Q3 ′27 → Q4 ′27

25–40%

labor $ addressable

+ Debt, equity, FS tying-out
+ Lead schedules & confirmations
+ Preliminary & final analytics
+ Suggested conclusions for review

Snap shifts from "presenting facts" to "suggesting next steps and conclusions" for senior/manager review — augmenting professional judgment.

Methodology & assumptions Audit fee benchmark of $100K reflects a mid-market private company audit (~$50–75M revenue) per industry surveys (Ideagen Audit Analytics, FERF Audit Fee Survey, legal/finance industry guides). Assumed gross margin of 22% on the audit engagement yields ~$78K in fully-loaded labor cost. Hour mix (52% staff / 28% senior / 12% manager / 8% partner) follows standard SMB audit firm structure. Loaded rates ($52 / $87 / $135 / $225) reflect fully-burdened labor cost (salary + benefits + overhead) per chargeable hour at SMB audit firms — these are cost figures, not billing rates. Snap's current hour savings reflect only the testing-execution portion of ToD, Tests of Controls, and journal entry testing (roughly 11–22 net hrs per procedure), excluding 3–6 hrs per procedure that remain with the auditor for parameter design, sampling, PBC management, exception follow-up, and conclusion write-up. Bar chart slivers are sized by approximate share of phase hours; amber roadmap slivers represent planned scope, not shipped capability. Roadmap percentages are illustrative targets, not commitments.