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What is the financial statement tie-out?

The financial statement tie-out is a slang phrase used by audit teams to refer to the process of agreeing every single number in the company’s financial statements (10-K,10-Q, or annual report) back to the audit workpapers. For example, if revenue in the financial statements was $95, the audit team would make sure the revenue number in the audit workpapers was $95.

Most audit teams create lead schedules to summarize trial balance information and the audit testing performed on specific accounts. The hope is that the lead schedule shows revenue of $95 as well. The main assertion covered is “valuation and accuracy”, which is part of the presentation and disclosure category of assertions.

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