Question for the group. When starting a new audit engagement, how much historical data do you typically request upfront? I've been asking for 36 months but some clients push back saying that's excessive. What's the minimum you'd work with?
How thorough should initial data collection be?
Depends on the client size honestly. For smaller accounts under $10K monthly, 24 months is usually sufficient. Large industrial clients with complex rate schedules, I insist on 36 months. Had a Xcel Energy industrial client where we found a transformer ownership error that had been running for 28 months - $47,000 recovery.
Aaron makes a good point about client size. I also factor in rate complexity. Simple general service accounts, 24 months works. But anything with time-of-use, coincident peaks, or interruptible service provisions needs the full 36 months to properly analyze billing patterns.
24 months minimum, 36 preferred. You need at least two full years to identify seasonal patterns and catch billing errors that might span multiple periods. I've found errors that went back 18 months that would have been missed with shorter lookback periods.