Flux analysis where every variance is explained to within 5%, every driver cited, before the board sees it
Every variance explained to within 5%, with cited drivers, before the board sees it.
See one case, screen by screen ↓Flux analysis explains why each material account moved between two periods, usually the income statement quarter over quarter, and documents the review for the auditor and the board. Flux Analysis does it with seven agents: they flag every line over the controller's threshold, find each variance's drivers in invoices, contracts and payroll, check the drivers add up to within 5% and draft cited commentary. Budget owners confirm the drivers and the controller approves every line.
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Every quarter the controller has to say why each material line on the income statement moved. Today an FP&A analyst exports two trial balances, sorts the differences in a spreadsheet, digs through invoices, contracts and payroll reports, and emails budget owners who answer late, without evidence, and often explain only the biggest item. The commentary that comes back says “timing” or “higher activity”.
Nobody checks that the stated drivers add up to the variance, so the remainder is quietly dropped. Nobody remembers what last quarter's commentary promised. And an accounting error — a prepaid licence expensed in one month — reads as “higher software spend” and reaches the board pack as a business change. Auditors rely on that review as a management review control, and audit inspectors keep finding that no one tested whether such reviews were precise enough to catch a material misstatement.
Estimated split for one segment's quarterly flux review, by hand and with the solution. Six days is the fictional group's Q2 by hand; two days is the design target.
Seven agents find each variance's drivers in the documents, test that they add up, and draft the commentary; owners confirm and the controller approves.
Kestrel & Vane Services North America, entity 3100, compares Q3 2026 with Q2 on close day 8. The commentary is due to the CFO on Thursday 15 October and the board pack on Friday 23 October. Here is how the controller works with the agents, screen by screen, in the working solution.
Raj opens the income statement, Q3 against Q2, already laid out by the agents: 20 lines compared, 11 over his threshold of $250,000 and 10%, or $1,000,000, or a sign flip. Each flagged line has a commentary note in the margin beside it, written as the auditor reads it. Four are approved, two are ready for him, three wait for an owner, one is sent back and one is a possible misstatement. A “Needs you” strip lists the four things only he can do.
Needs you: “6300 IT and software: possible misstatement · $440,000 belongs in prepaid · entry drafted.”
The driver agent read 64 postings to 6100 Marketing and sourced two drivers: $410,000 for the National Facilities Expo, 9–11 September, and $160,000 for the new Fieldstone Creative agency retainer. The sceptic agent, which did not write the commentary, re-added them against the trial balance: $570,000 of a $612,000 change. The $42,000 left over is 6.9%, above the 5% tolerance, so it sent the line back.
“Sceptic agent: sent back 09:31 — $42,000 (6.9%) has no driver; three postings from a new vendor carry only ‘BP-20931 merch’.”
Each driver is a chip. Raj clicks INV-8812 and the Harbor Expo Partners invoice opens beside the statement: booth space, booth build, audio-visual and freight for the expo, $410,000, PO 4500-7702, with the lines the agent read highlighted. The evidence is the document, not the general ledger description.
“Why the agents cite it: driver evidence for 6100 Marketing. Read 13 Oct 06:27 by the driver agent; checked by the sceptic agent against the trial balance.”
Raj asks the driver agent to search again. It looks up the new vendor in procurement, reads PO 4500-7731 — “NFE 2026 booth giveaways — 3,500 branded items” — and invoice BP-20931 from Brightline Promotions, $42,000, shipped to the expo hall. The sceptic re-adds: 410,000 + 160,000 + 42,000 = 612,000, unexplained $0, all seven tests passed. The prior-period agent adds what Q2 promised: “no events are planned until Q4”. The expo was forecast for 4 November, so the commentary says Q4 marketing should fall by about $450,000.
The driver agent never invents a driver: what it cannot source, it reports as unexplained.
The owner liaison sends Marcus a request with one new driver and its evidence. He already confirmed the expo and the retainer at 08:52. For the $42,000 of branded merchandise he can confirm, correct the amount, or say “not mine”. He confirms; the answer is recorded with his name and the time.
“You can confirm only drivers on budgets you own. The controller, Raj Mehta, approves the commentary after you.”
With the drivers sourced, checked and confirmed, Raj approves 6100 Marketing. He chooses a reason code — A1 Explained, supported and confirmed; A2 Explained, correcting entry approved; or A3 Accepted with a follow-up next quarter — and can add a note for the auditor.
“You did not edit this commentary · the sceptic passed it · owners confirmed every driver.”
The line view shows the bridge from $1.61M in Q2 to $2.22M in Q3, each bar a driver with its source: INV-8812, SOW 3 Jul, BP-20931. Explained 100.0%, unexplained $0. Tabs hold the 64 transactions, the commentary versions, each agent run step by step, the prior periods and the history. The decision panel shows every step from detected to approved, with Raj's name, time and reason code.
“A person who edited a commentary cannot approve it.”
IT and software is up $370,000. The driver agent found a $480,000 annual licence for the field-service platform, invoice OS-55102, covering 1 September 2026 to 31 August 2027, posted in full on 14 September. The sceptic's service-period test failed: only one month, $40,000, belongs to Q3. It stopped the line and drafted JE-Q3-3100-0412 — debit 1300 Prepaid expenses $440,000, credit 6300 IT and software $440,000 — parked for Tara Quinn, the senior accountant, to post once Raj approves.
“You did not edit this commentary · the sceptic stopped the line and drafted the entry · over $25,000, so it needs you.”
The sceptic checks every first draft: drivers add up, the evidence is a document, cut-off, service period, capital or expense, account class and duplicates. Across the group's 214 lines over threshold, 31 were sent back at least once, 23 were resolved by a second pass and 4 are possible misstatements. In entity 3100 only 6300 is stopped.
The board pack for Services North America is built from approved commentary only. Raj ties out the numbers: 46 of 46 tie to the ledger, with the trial balance locked 9 October 18:00. Lines not yet approved are held back with their status, and export opens only when every flagged line is approved. A late entry reopens the sentences it touches.
“6 of 11 lines are held back until they are approved.”
The same quarter's flux review, seen by five of the people who carry it — what the quarter looked like, and what it looks like now.
Seven agents find each variance's drivers in the documents, test that they add up, and draft the commentary; owners confirm and the controller approves.
Compares the two locked trial balances, maps accounts to statement lines, applies the controller's thresholds and flags breaches and sign flips.
Breaks each flagged variance down to transactions and finds the cause in invoices, purchase orders, contracts, payroll and the forecast, each driver with its source and confidence.
Recomputes each variance from its own read of the trial balance, re-adds the drivers, tests each against its document and runs cut-off, service-period, capital or expense, classification and duplicate tests.
Drafts the commentary in the house style: the number first, the drivers largest first with sources, what recurs, what was promised — in an auditor version and a board version.
Sends each driver to its budget owner with the evidence, collects confirm, correct or not mine, chases on the clock and escalates.
Reads the last four quarters of commentary, tracks the promises — “one-off”, “timing”, “no events until Q4” — and checks them against this quarter.
Puts approved commentary into the board pack, the lender report and an MD&A draft, ties every number to the ledger and reopens sentences when a number changes.
Approves every line and entry; the CFO signs the pack. The agents propose; a named person decides.
Ask why a line moved, who has not answered, or what could be an error. Every figure is cited, and the assistant never approves, posts or sends to the board.
Why is marketing up 38% on the quarter?
Marketing rose $612,000 (38.0%) to $2,222,400. Three drivers, each from a document: $410,000 for the National Facilities Expo, 9–11 September (INV-8812); $160,000 for the new Fieldstone Creative retainer, SOW signed 3 July; $42,000 of branded merchandise for the same expo (BP-20931). The expo was forecast for November, so Q4 should fall by about $450,000.
Which lines could be accounting errors, not business changes?
In entity 3100, one: 6300 IT and software. A $480,000 annual licence covering 1 Sep 2026 – 31 Aug 2027 was expensed in full on 14 September. Eleven months, $440,000, belong in prepaid expenses; the entry is drafted for you. Across the group there are three more: a freight accrual reversed twice ($186,000), implementation staff costs expensed on a capitalised project ($312,000) and September rent posted in October ($94,000). Nothing is posted.
Who still has to confirm a driver, and who is late?
Ingrid Solheim — the $310,000 legal driver on 6500; the clock passed at 09:15 and it is escalated to you. Hannah Cole — 4 drivers on 5300 Vehicle and 5400 Warranty, with 7 h 25 m left. Across the group 23 lines wait for an owner and 4 are overdue.
Draft the board summary for Services North America
Revenue rose 1.2% to $142.5M. Operating income fell $4.55M to $16.45M as the $3.1M Riverside milestone moved to December at the customer's request and the business hired 62 technicians ahead of the Larkspur contract. The pack uses approved commentary only: lines not yet approved are held back, and every number links to the ledger.
13 screens from the working solution, on its sample data. Pick one to see it large.
What the controller and the administrator configure. Every change is saved as a new version and logged.
| Setting | Default | Choose from |
|---|---|---|
| Income statement threshold (T-IS-1) | $250,000 and 10%, or $1,000,000, or a sign flip | Dollar amount · and / or · percentage · a larger dollar amount · sign flip on or off · simulate before saving |
| Balance sheet threshold (T-BS-1) | $500,000 and 5% | Dollar amount · and / or · percentage |
| Overrides by account | 6700 Bad debt: $100,000 or 10% · 7100 FX: any sign flip, or $150,000 | Add an override per account, with the reason |
| Unexplained tolerance | 5% | 1% to 10% — can be tightened, never above 10% |
| Evidence must be a document | On | Locked |
| Misstatement tests | Cut-off, service period, capital or expense, classification, duplicates | Each test on or off |
| Owner clocks | Confirm in 24 hours · reminder at 16 · escalation at 24 | Hours for each clock; escalation goes to the owner's manager and the controller |
| Reason codes | A1–A3 to approve · S1–S4 to send back | Edit a meaning · add a code |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (KPMG, Trends in material weaknesses, 2026 — 238 of 3,307 FY2025 annual reports; Audit Analytics / Ideagen — 391 restatements in 2025; PCAOB staff update on 2022 inspections, July 2023, on auditors not evaluating whether review controls operated at a precise enough level). People, companies, vendors and figures named on this page are fictional — characters and sample data in the working solution.
Flux analysis explains why each material account moved between two periods, usually the income statement quarter over quarter, and documents the review for the auditor and the board. Flux Analysis does it with seven agents: they flag every line over the controller's threshold, find each variance's drivers in invoices, contracts and payroll, check the drivers add up to within 5% and draft cited commentary. Budget owners confirm the drivers and the controller approves every line.
A sceptic agent that did not write the commentary recomputes the variance from its own read of the trial balance and re-adds the drivers. Any line with more than 5% unexplained is sent back with exactly what is missing, and the driver agent searches again. The tolerance can be tightened but never set above 10%.
It tests for one. The sceptic runs cut-off, service-period, capital or expense, classification and duplicate tests on every driver. When a driver looks like an error — a twelve-month licence expensed in one month — it stops the line as a possible misstatement and drafts the correcting entry for the controller to approve. It never posts the entry.
Each driver goes to the person who owns the spend, with its evidence attached. They confirm it, correct the amount or say “not mine”, and a correction sends the line back through the agents. Owners are reminded at 16 hours and escalated to their manager and the controller at 24.
Yes. The prior-period agent reads the last four quarters of commentary and checks the promises — “one-off”, “timing”, “no events until Q4” — against this quarter. A broken promise is said in the new commentary; approved past commentary is never edited.
The solution is built to show what an auditor tests: the threshold and its precision, the data the review relied on, what the reviewer did and how each outlier was followed up. The sign-off page holds that checklist, the controller and CFO signatures and an evidence pack to export, and the auditor gets read-only access that expires.
Yes. Agents never approve, post, sign, change a threshold or send to the board. Budget owners confirm drivers, the controller approves every line and every correcting entry with a reason code, a person who edited a commentary cannot approve it, and the CFO signs the pack.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your chart of accounts, thresholds, house style and a past quarter's flux workbook — and it goes live once every quality gate has passed. We will walk you through it on your own last quarter first.
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