Compliance Monitor Skill

Regulatory tracking, deadline management, and audit prep for accounting and finance firms.

When to Use

• - Tracking federal and state tax filing deadlines for clients
• Monitoring GAAP/FASB/IRS regulatory changes that affect client engagements
• Generating audit preparation checklists
• Managing compliance calendars and sending deadline reminders
• Flagging upcoming obligations across a client portfolio

When NOT to Use

• - Actual tax preparation or filing — use a tax professional and licensed software
• Securities/investment compliance (SEC, FINRA, CFTC) — out of scope
• Legal advice — always escalate to counsel
• Real-time regulatory databases — this skill uses web search + known sources; always verify with primary sources
• International compliance outside US federal/state — limited coverage

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Core Capabilities

1. Filing Deadline Tracking

Track key IRS and common state filing deadlines:

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To look up a specific deadline or extension:

1. 1. Use web_search with query: "[form number] [tax year] due date IRS" or INLINECODE2
2. Cross-reference with IRS.gov Tax Calendar: https://www.irs.gov/businesses/small-businesses-self-employed/online-tax-calendar

2. Regulatory Change Monitoring

Monitor for updates from key sources:

Federal Sources:

• - IRS Newsroom: https://www.irs.gov/newsroom
• FASB Standards Updates (ASUs): https://www.fasb.org/page/PageContent?pageId=/standards/accounting-standards-updates.html
• AICPA Standards: https://www.aicpa-cima.com/resources/landing/professional-standards
• Federal Register (tax regs): https://www.federalregister.gov/agencies/internal-revenue-service

Search Pattern:
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What to watch for:

• - New or revised tax forms
• Rate/threshold changes (standard deduction, contribution limits, depreciation tables)
• New reporting requirements (e.g., 1099-K threshold changes, digital asset reporting)
• FASB ASUs affecting client financials (revenue recognition, lease accounting, credit losses)
• State conformity with federal changes

3. Audit Preparation Checklists

Financial Statement Audit Checklist

Pre-Audit (60-90 days before fieldwork):

• - [ ] Confirm audit scope and materiality thresholds with engagement partner
• [ ] Update permanent file: entity structure, key contracts, related parties
• [ ] Request client PBC (Provided By Client) document list
• [ ] Confirm trial balance tie to prior year audited financials
• [ ] Identify significant accounting estimates (impairment, reserves, fair value)
• [ ] Update risk assessment — new systems, transactions, personnel changes

PBC Document Request List (standard):

• - [ ] General ledger (full year)
• [ ] Bank statements and reconciliations (all accounts)
• [ ] AR aging schedule and subledger
• [ ] AP aging schedule and subledger
• [ ] Fixed asset register with additions/disposals
• [ ] Debt agreements, schedules, and confirmation responses
• [ ] Lease agreements (ASC 842 schedules)
• [ ] Payroll records and tax filings (941s, W-3)
• [ ] Entity formation docs, minutes, and resolutions
• [ ] Related party transaction schedule
• [ ] Significant contracts entered/modified during year
• [ ] Insurance policies and certificates
• [ ] Prior year audit report and management letter

Fieldwork:

• - [ ] Confirm cash — bank confirmations sent and returned
• [ ] Test AR — confirmations, subsequent receipts
• [ ] Test AP — search for unrecorded liabilities, subsequent disbursements
• [ ] Inventory count observation (if applicable)
• [ ] Test journal entries for unusual/late entries
• [ ] Analytical procedures — fluctuation analysis vs. prior year and budget
• [ ] Evaluate going concern indicators

Wrap-Up:

• - [ ] Subsequent events review (S-1 and S-2 events)
• [ ] Representation letter obtained
• [ ] Contingencies and commitments confirmed
• [ ] Disclosure checklist completed
• [ ] Final quality review

IRS Audit Response Checklist

• - [ ] Identify audit type: correspondence, office, or field
• [ ] Note response deadline (typically 30-60 days from notice date)
• [ ] Pull all documents related to questioned items
• [ ] Prepare organized binder: chronological, tabbed by issue
• [ ] Draft response letter — factual, concise, no volunteering
• [ ] Identify potential penalties and abatement opportunities
• [ ] Consider power of attorney (Form 2848) if CPA will represent
• [ ] Document all communications with IRS (dates, contact names, reference numbers)

4. Compliance Calendar Generation

To generate a compliance calendar for a client, collect:

• - Entity type (individual, S-Corp, C-Corp, Partnership, LLC)
• State(s) of filing
• Fiscal year end
• Special situations: payroll, sales tax, multi-state, nonprofit, foreign accounts

Then produce a month-by-month action list with:

• - Deadline date
• Form/filing required
• Responsible party (client vs. firm)
• Status tracking (pending / in progress / filed)

Example output format:
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5. Regulatory Change Alert Workflow

When asked to monitor for regulatory changes on a topic:

1. 1. Search for recent updates:

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1. 2. Summarize the change: what changed, effective date, who it affects, action required

1. 3. Flag impact for known client types:

- Individuals vs. businesses - Industry-specific (real estate, healthcare, manufacturing) - Size thresholds that trigger/exclude the rule

1. 4. Recommend action: update workpapers, notify clients, revise checklists, or monitor further

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Usage Examples

Example 1: Client Deadline Check

"What are all filing deadlines for our S-Corp clients in Q1 2026?" → Generate list: 1099s (Jan 31), W-2s (Jan 31), 1120-S (Mar 17) or extension, state variants

Example 2: Regulatory Alert

"Has the 1099-K threshold changed for 2025?" → web_search for IRS 1099-K 2025 threshold → summarize current rule, effective date, client impact

Example 3: Audit Prep

"We have a financial statement audit starting in 6 weeks. What do we need?" → Run through Pre-Audit checklist, generate PBC request list, identify risk areas

Example 4: Compliance Calendar

"Build a compliance calendar for a new C-Corp client in Illinois, FYE June 30" → Map fiscal year to federal Form 1120 deadlines, IL corporate income tax, plus any payroll/sales tax obligations

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Key References

• - IRS Tax Calendar for Businesses: https://www.irs.gov/businesses/small-businesses-self-employed/online-tax-calendar
• FASB Standards & ASUs: https://www.fasb.org
• AICPA Practice Aids: https://www.aicpa-cima.com
• State Tax Authority Directory: https://taxfoundation.org/state-tax-agencies/
• FinCEN (FBAR, BSA): https://www.fincen.gov

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Important Disclaimers

This skill provides compliance frameworks and checklists — not legal or tax advice. All deadlines should be verified against primary sources before relying on them. Tax law changes frequently; always confirm current rules with IRS.gov or a licensed tax professional before advising clients.