Regulated RAG for FASB & ASC Guidance at a Leading Advisory Firm

Client:

A leading accounting and advisory firm

Time to First Value:

Under 4 Weeks

Users Enabled:

Technical Accounting & Advisory Teams

Our Problem

Problem

The firm's technical accounting managers regularly work complex PE-backed engagements — manufacturing carve-outs, revenue recognition positions, lease modifications — that span multiple ASC sections and cross-references, all of which must be traced and cited in a defensible memo.

The problem wasn't a lack of expertise. It was the sheer density and interconnectedness of the standards themselves.

FASB's Accounting Standards Codification is massive — thousands of sections, subsections, and updates spanning revenue recognition, leases, financial instruments, business combinations, and dozens of other topics. A single client question about revenue recognition on a long-term contract might require pulling from ASC 606-10-25, cross-referencing 606-10-32, checking recent FASB updates, and reconciling interpretive guidance — all before drafting a position.

The result:

30+ minutes per ASC lookup, manually searching through codification sections, checking cross-references, and verifying that guidance was current and complete.
Junior staff repeatedly escalating the same questions, because navigating the standards required experience that couldn't be easily transferred.
Risk of incomplete positions, because it was easy to miss a related ASC section or a recent update that affected the analysis.

The firm needed a way to search across FASB and ASC guidance instantly, surface the right sections with their cross-references, and draft cited positions in seconds instead of hours.

Our Solution

Solution

We deployed a Regulated RAG (Retrieval-Augmented Generation) system purpose-built for navigating FASB and ASC accounting standards, with a focus on precision, citation integrity, and the interconnected structure of the codification. Key implementation details:

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Hybrid retrieval engine: Combines semantic search and keyword retrieval to find exact ASC sections in seconds. This dual approach ensures the system catches both conceptual matches ("revenue recognition for long-term contracts") and specific codification references ("ASC 606-10-25") without sacrificing precision.

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Comprehensive standards ingestion: The RAG pipeline indexes the full body of FASB/ASC guidance — codification sections, FASB updates, interpretive guidance, and regulatory materials — creating a searchable, always-current knowledge layer across the entire standards landscape.

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Cross-reference awareness: The system understands relationships between related ASC sections (e.g., 606-10-25 and 606-10-32), surfacing adjacent guidance that analysts might otherwise miss — reducing the risk of incomplete positions.

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Evaluation framework for retrieval quality: We built an eval harness into the pipeline from day one, continuously measuring retrieval precision, citation accuracy, and response quality against gold-standard answers provided by the firm's senior accountants.

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How it fits: The system integrates directly into the analyst workflow — no new tools to learn, no separate application to switch into. Analysts query the system in natural language and receive structured, cited responses they can use immediately or refine into client deliverables.

Delivered as a cross-functional pod — a Forward Deployed Engineer as Solution Owner, an AI Engineer running the build and optimization, and a Change & Enablement Lead aligning stakeholders and training users — the entire V1 was scoped, built, and delivered to the firm in under one month.

Our Results

Results

8–20 hours/month saved per analyst — reinvested in client-facing work, not standards research.

< 10 seconds to surface ASC guidance — down from 30+ minutes of manual searching through codification sections.

100% of answers include explicit ASC citations — every response links back to the exact codification section or guidance document it drew from.

Before, a single ASC lookup took 30+ minutes of manual searching through codification sections — now it takes less than 10 seconds via semantic and keyword retrieval. Memo drafting went from hours of pulling together citations by hand to auto-drafted responses with sources and explicit citations. Junior staff no longer need to repeatedly escalate the same standards questions to seniors — they have self-serve access to the same guidance. And citation coverage moved from manual and error-prone to 100% traced on every answer.

Bottom line: Analysts reclaim 1–2 days per month. Senior staff spend less time fielding repeat questions. And every position the firm produces is now grounded in the full depth of FASB and ASC guidance — with every citation traced to source.