A 7-part unclaimed property audit readiness checklist 

If you think unclaimed property audits are rare, random, or something that only “other companies” deal with, you're mistaken. 
 

States are becoming more aggressive, more targeted, and far more sophisticated in how they select companies for audit. Once your organization ends up on their list, the process doesn’t just tap your resources. It can consume bandwidth for years. 
 

Here’s the reality. Unclaimed property audits routinely span 25 to 40 states, dig into 10+ years of historical data, and are driven by third-party contract auditors whose financial incentives are tied directly to audit findings. In short, these audits are long, detailed, and often stacked against companies that aren’t prepared. 
 

That’s why audit readiness isn’t a “nice to have.” It’s your best defense. It’s how companies stay in control of the process, reduce exposure, and avoid scrambling when a notice arrives. 
 

Understanding the truth about unclaimed property audits

Most companies don’t realize how different unclaimed property audits are until they're already in the middle of one. Companies often expect something similar to an income or sales tax audit — structured, time-bound, and predictable. Instead, they encounter a process that feels open-ended, historical, and extremely document heavy. 

Key challenge #1: No standard statute of limitations

Unclaimed property doesn’t operate under the same statute of limitation protections as other tax types. 

 
If your company hasn’t filed unclaimed property reports historically, states can look back a decade or more. Standard seven-year record retention policies aren’t enough. Missing documentation opens the door for estimation, penalties, and interest — all of which drive exposure quickly. 

Key challenge #2: Contract auditors drive the process

These audits are rarely led by state employees. Many states outsource audits to third-party firms paid on a contingency basis. That means their compensation increases with audit findings. With multistate authority, auditors can request data spanning 25 to 40 jurisdictions and more than 10 years of historical activity. 

The burden of proof is entirely on the company, requiring teams to research hundreds — sometimes thousands — of historical transactions to prove they are not unclaimed property. When companies can’t produce documentation, auditors treat it all as unclaimed property exposure. 

In short, here’s what companies should expect from today’s audit environment:  

• Multistate examinations covering numerous entities and business lines. 
• Lookback periods of 10 to 15+ years. 
• Contingency-fee auditors driving aggressive timelines. 
• Estimation methodologies — and potential penalties and interest — when records are incomplete. 

Why audit readiness matters

Many organizations say, “We’ll deal with an audit if it happens.” But when it does happen, they’re immediately thrown into a reactive scramble: locating old data, reconstructing past processes, and trying to explain decisions made 10 years ago — all while auditors press forward. 

Audit readiness changes the dynamic. It moves you from reacting to leading. 

When an organization is audit ready, it benefits from:

• Shorter audit timelines and less disruption. Documentation, data sources, and processes are already mapped and organized. 
• More leverage in discussions with auditors. Clear documentation helps rebut assumptions, challenge estimation, and prevent worst case scenarios. 
• Lower financial exposure. Accurate scoping and strong records reduce reliance on estimation — a key driver of unexpected liability. 
• Stronger credibility with states and auditors. Being organized signals sophistication and good faith compliance, which often improves tone and pace. 

 
But the biggest benefit? Audit readiness keeps you in control, not the auditors. You’re not digging through old files, debating internal history, or piecing together incomplete records under pressure. You already know what you have, what’s missing, and how to explain it. 

Unclaimed property audit readiness checklist 

If an unclaimed property audit kicks off tomorrow, how many of these could you confidently check off? 

This checklist highlights the core areas auditors push on — and where companies either gain control or lose leverage. 

1. Ownership & Governance: Who Actually Owns Unclaimed Property? Clear ownership is the foundation of audit readiness. When responsibility is scattered, audits drag on and inconsistencies multiply. 

• Formal internal ownership of unclaimed property compliance 
• Documented policies and procedures for identifying, aging, researching, and reporting property 
• Cross-functional alignment across accounting, AP, AR, payroll, treasury, legal, and IT. 
• Clarity around each function’s role in supporting compliance. 

2. Filing history and compliance posture: Do you know where you stand? Auditors always start by testing your reporting history. Gaps become immediate red flags. 

• Clear view of where you’ve filed and which entities/states should be included 
• Reconciliation of reported property to the general ledger and source systems 
• Identification of historical inconsistencies, missed filings, or breaks in activity 
• Awareness of exposure areas based on non-filing or underreporting 

3. Data and record retention: Could you produce 10 to 15 years of records? Missing data is the No. 1 driver of estimation, penalties, and interest. 

• Ability to access transaction-level detail by property type and year 
• Retention policies aligned with unclaimed property lookback periods 
• Ability to reproduce historical data from legacy or decommissioned systems 
• Clean, well-organized data that tells a consistent story 

4. Property type risk: Do you know where the risks are? Certain property types are more likely to create exposure. 

• Identification of high-risk categories: AP, payroll, credit balances, customer overpayments, unapplied cash, etc. 
• Consistent policies across systems and entities 
• Documentation supporting exclusions, exemptions, and write-offs 

5. Due diligence and owner outreach: Can you prove you tried to contact owners? Due diligence is a major audit focus. 

• Documented due diligence procedures 
• Evidence of letters, thresholds, and mail dates 
• Compliance with state specific requirements 
• Retained proof of responses received 

6. Third-party auditor management: Are you ready for their process? Third-party auditors request broadly, move quickly, and exploit any uncertainty. 

• Defined protocol for audit communication 
• Centralized tracking of requests and submissions 
• Consistent, complete responses 
• Awareness of privilege and when to involve counsel 

7. Voluntary compliance and risk mitigation: Are you proactively managing risk? Readiness isn’t only about surviving an audit — it’s about reducing the likelihood and impact of one. 

• Evaluation of VDA or self-review options 
• A remediation roadmap to strengthen weak areas 
• Monitoring as business models, systems, and entities evolve 
• Commitment to continuous improvement 

Final Thoughts

Audit readiness isn’t a one-time task. It’s an ongoing discipline. 

As your business grows, adopts new systems, expands into new states, or changes operating models, your unclaimed property risk profile changes right alongside it. The companies that fare best in audits are those that treat readiness as part of their core compliance framework, not an occasional cleanup effort. 

When organizations invest in clear documentation, consistent processes, and cross-functional alignment, they walk into an audit with structure instead of stress. Even the most complex multistate audit becomes manageable when you already know what data you have, what’s missing, and how to explain it. 

The right preparation turns an audit from a reactive burden into a predictable, controlled process. 

 
With the right support behind you, your organization can navigate it with confidence rather than urgency. 

At Kodiak Solutions, we help companies strengthen audit readiness by helping them gain a clear understanding of their overall unclaimed property risk through comprehensive risk assessments and the development or enhancement of sound policies and procedures. 

Taking a proactive approach can allow organizations to remediate exposure through state voluntary compliance programs or Voluntary Disclosure Agreements before an audit occurs. Kodiak also supports companies with the first line of defense—annual unclaimed property filings—as well as managing complex multistate audits, supporting VDAs, and providing ongoing unclaimed property compliance services. 

Together, these efforts bring clarity, structure, and peace of mind to an area that often feels overwhelming. 

Let’s help you prepare for your unclaimed property audit.