Compliance Monitor

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

Core Capabilities

1. Filing Deadline Tracking

Track key IRS and common state filing deadlines:

Key Federal Deadlines (Tax Year 2025):
- Jan 15: Q4 estimated tax payment (Form 1040-ES)
- Jan 31: W-2 / 1099-NEC / 1099-MISC employer filing
- Feb 28: Paper 1099 information returns to IRS
- Mar 17: S-Corp / Partnership returns (1120-S, 1065) — or 6-month extension
- Apr 15: Individual (1040), C-Corp (1120), FBAR (FinCEN 114), Gift Tax (709)
- Apr 15: Q1 estimated tax payment
- Jun 16: Q2 estimated tax payment
- Sep 15: Q3 estimated tax payment; extended S-Corp/Partnership returns
- Oct 15: Extended individual and C-Corp returns
- Dec 31: Year-end planning cutoff (retirement contributions, charitable gifts, etc.)

To look up a specific deadline or extension:

1. Use web_search with query: "[form number] [tax year] due date IRS" or "[state] [entity type] filing deadline [year]"
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:

web_search: "IRS [topic] [year] update" OR "FASB ASU [year] [topic]" OR "GAAP change [year] [industry]"

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:

CLIENT: Acme Corp (S-Corp, Texas, FYE Dec 31)
COMPLIANCE CALENDAR — 2026

JAN 31  → W-2s to employees; 1099-NECs to contractors
JAN 31  → File W-2s (W-3) and 1099-NECs with IRS
MAR 17  → Form 1120-S due (or file 7004 extension)
APR 15  → TX Franchise Tax Report due
APR 15  → Shareholder K-1s delivered
SEP 15  → 1120-S extended return due
DEC 31  → Year-end tax planning review

5. Regulatory Change Alert Workflow

When asked to monitor for regulatory changes on a topic:

1. Search for recent updates:

   web_search: "[topic] IRS 2026 update" 
   web_search: "FASB ASU 2025 2026 [topic]"
   web_search: "[state] tax law change 2026"
   

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

3. Flag impact for known client types:

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

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

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

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

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.