Three versions of the trial balance later: how to see exactly what changed before you redo the accounts

The first trial balance arrives in June. You review it, send queries and propose adjustments. In August a revised TB arrives, then a "final" one in September, and a week before the AGM the accountant sends "the final final, small changes only". By then the draft statements, the notes, the ratios and the analytical review were all prepared from an earlier version. The difficult question is not how to redo the accounts. It is what exactly changed, and whether every change is one you expected. This article sets out a method that works with Excel or with software.

1. Keep every version, dated and untouched

Version problems usually start with file names. "TB.xlsx", "TB revised.xlsx" and "TB final.xlsx" tell you nothing a month later. A simple discipline avoids most of it:

• Name each file with the client, the year and the date received, for example ABC Pvt Ltd FY25-26 TB recd 2026-08-14.xlsx. Note the date the client exported it too, if the export shows one.
• Never overwrite or edit the client's file. Work on a copy. The original is what the client sent, and you may need to show that later.
• Record which version each draft was prepared from. A line at the top of the draft statements or the lead schedules ("prepared from TB received 14 Aug 2026") saves a lot of confusion.
• Ask the client what they changed. Ask for a list of the entries passed since the last version, with voucher dates and numbers, or a day book for the period of the changes. You will check it against the comparison, not rely on it.

2. Compare ledger by ledger, not total by total

Comparing the net profit and the balance sheet total tells you that something changed, not what. The comparison has to be at ledger level, and it should sort every ledger into one of these groups:

The last row is easy to miss. If the TB shows opening balances, compare them with last year's signed accounts in every version. Sometimes a change is expected: the client has finally posted last year's audit adjustments so that the openings now agree, or has merged or renamed a ledger, so the total is the same. Otherwise a change means entries were posted into, or data altered in, the previous year after it was audited. Under AS 5 a prior period error is corrected through the current year's profit and loss, not by changing opening balances (SA 510 asks you to check that the prior year's closing balances were correctly brought forward). Either way, find out why.

3. Reconcile the change in profit to the entries passed

Once you have the list of changes, reconcile them. The arithmetic is simple:

• The changes in the profit and loss ledgers, added together, equal the change in the profit. If profit before tax went up by ₹4.2 lakh, the changed income and expense ledgers must add up to ₹4.2 lakh.
• Every entry has two sides. The changes in all ledgers taken together, balance sheet and profit and loss, should net to nil. If they do not, a ledger is missing from one of the files, or one of the trial balances does not agree.
• Match the changes to the client's list of entries. Tick off each entry against the ledgers it touched. Whatever is left over on either side, a change with no entry or an entry with no change, is your list of questions.

Write the reconciliation down: profit as per the earlier TB, each adjustment with a short description, profit as per the revised TB. That one page is the bridge between your earlier work and the new figures.

4. Did they post what you asked for, and only that?

Most revised TBs exist because the auditor proposed adjustments or raised queries. So the comparison has a second purpose: to check the client against your own list.

• Posted as proposed? The amount, the ledgers and the period should match your adjustment. A provision of ₹1.8 lakh posted as ₹1.5 lakh, or posted to a different expense head, is a new difference to discuss.
• Not posted? An adjustment that does not appear stays on your list. It has to be followed up or, if management declines to correct it, carried to the summary of uncorrected misstatements. SA 450 requires you to communicate the misstatements you accumulated to management on a timely basis and request that they be corrected.
• Posted, but with something else as well? Entries you did not propose need the same attention as any other transaction. A late "rectification" that happens to improve a ratio or a covenant figure is worth a question.
• Corrections the client found themselves? If, at your request, management examined an area and corrected the errors they found, SA 450 (paragraph 7) requires you to perform additional procedures to determine whether misstatements remain. A corrected balance is not automatically a right balance.

Close each query and review point only when the revised TB shows the answer, and say so: "Provision for gratuity ₹2.10 lakh posted, JV 412 dated 31.03.2026, agrees to actuarial report; TB recd 14 Aug." That is far better evidence than a tick.

5. Back-dated entries and the audit trail

Year-end adjustments are normally dated 31 March, and that is fine. The concern is different: entries that change months you have already tested, opening balances, or vouchers you have already vouched. Look at the voucher dates on the client's list, and where the software allows it, at when each entry was actually created or altered.

For companies this connects to two rules. The proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires a company that keeps its books in accounting software, for financial years from 1 April 2023, to use software with an audit trail (edit log) of each change made in the books, with the date of the change, and to make sure the audit trail cannot be disabled. Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 requires the auditor to report whether that facility operated throughout the year for all transactions, was not tampered with, and was preserved. When a revised TB contains changes to earlier periods, the edit log is the place to see who changed what and when. ICAI's Implementation Guide on Rule 11(g) discusses how to approach this reporting. Changes that you cannot see in the log, or a log that was switched off for part of the year, affect what you can say under Rule 11(g), not only the figures.

For non-corporate clients Rule 11(g) does not apply, but the question is the same: if earlier periods changed after you tested them, your earlier work may no longer cover the figures.

6. Update the mapping, the statements and the analytics

With the changes understood, carry them through:

• Map the new ledgers and recheck any ledger that moved group. Even with an unchanged balance, a regrouped ledger can land on a different line, for example from trade payables to other current liabilities.
• Redo the notes that moved, and check that every note still totals to the face of the statements.
• Recompute what depends on the figures: the ratios and the explanations for changes over 25%, the ageing schedules, the MSME disclosure, the tax provision, and any CARO or report wording that quoted an amount.
• Refresh the analytical review. SA 520 requires analytical procedures near the end of the audit to help you form an overall conclusion on whether the statements are consistent with your understanding of the entity. A review done on the June TB is not that review if the figures moved in September.
• Recheck materiality if the benchmark (profit or revenue) moved materially.

7. The Excel method, and where it breaks

If you compare in Excel, put the two trial balances on two sheets with the ledger name, the group and one closing balance column (debit positive, credit negative). Then:

1. On the revised sheet, pull the old balance with XLOOKUP (or VLOOKUP with exact match, FALSE) on the ledger name, and compute the difference.
2. Do the same in the other direction, from the old sheet to the revised one, to catch ledgers that disappeared. A one-way lookup shows only new ledgers.
3. Look up the group as well, and flag rows where it differs.
4. Filter for non-zero differences, a "not found" result, a group change, and a change in sign.
5. Check that the total of the differences is nil and that the profit and loss differences equal the change in profit (with debits positive, an increase in profit shows as a negative total).

The weak point is the ledger name. A renamed ledger ("Sundry Debtors - Sharma" to "Sharma Traders") shows as one ledger removed and one new ledger added. Trailing spaces, non-breaking spaces from the export and duplicate names break the lookup without warning (capital letters do not matter, as the lookup ignores case). Pair the "removed" and "new" lists by amount, use TRIM (with SUBSTITUTE to remove non-breaking spaces, CHAR(160)) on both sheets, and check duplicates before you trust the result. With a few hundred ledgers this takes time, which is why many firms use software that does the comparison for them.

8. What to keep on file

SA 230 requires documentation that lets an experienced auditor with no previous connection with the audit understand the procedures performed, the evidence obtained and the significant matters and conclusions. Its application material says you need not keep superseded drafts of working papers and financial statements. For revised TBs, that suggests:

• The final trial balance the signed statements were prepared from, identified as final, with its date.
• The comparison and the profit reconciliation between each version where the figures changed after you had reviewed them.
• Your adjustment list showing what was posted, what was not, and how the uncorrected items were evaluated.
• The queries and review points closed against the revised figures, with the reference to the TB version.

Earlier drafts of the statements can go. The trail that explains how the figures moved from the TB you first reviewed to the one you signed on should stay.

Frequently asked questions

Sources

• ICAI — SA 230 Audit Documentation
• ICAI — SA 450 Evaluation of Misstatements Identified during the Audit
• ICAI — SA 520 Analytical Procedures
• ICAI — Implementation Guide on Reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014
• Companies (Accounts) Second Amendment Rules, 2022 (G.S.R. 235(E), 31 March 2022) — proviso to Rule 3(1); Companies (Audit and Auditors) Amendment Rules, 2021 (G.S.R. 206(E), 24 March 2021) — Rule 11(g)

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