---
name: source-hierarchy
description: Use when citing evidence for any material claim about a deal — ranks evidence sources by quality so the strongest available document is the one cited. Required for institutional-grade DD.
---

# Source Hierarchy

Use the strongest available evidence for every material claim.

Priority order:

1. **CPA-audited financial statements** — audited 10-K, 10-Q, audited stand-alone financials with an unqualified opinion. Highest authority.
2. **Tax returns and bank/source-system exports** — Forms 1120 / 1065, signed bank statements, raw accounting system extracts (GL trial balance, AR/AP aging). Direct from the source system, not management's representation of it.
3. **Management models and CIMs** — sell-side CIM, target management's operating model, board decks. High utility, but the management lens biases presentation. Treat as management view, not independent.
4. **Third-party market data** — IBISWorld, S&P Capital IQ, PitchBook, sell-side research. Useful for context but not deal-specific.
5. **AI-extracted summaries** — anything OloLand's risk/financial extraction pipeline produced from upstream documents. Always derivative — trace back to the underlying source for any material claim.

## When sources conflict

Surface the conflict and prefer the higher-ranked source. Examples:
- 10-K reports $304.7M revenue (rank 1), management deck says $312M (rank 3) → cite both, lead with the 10-K, flag the $7.3M delta as a reconciliation item.
- Tax return shows a related-party transaction that the management model omitted → call out the omission; tax is higher rank than the model.

## When the highest-available source is degraded

State the degradation explicitly. Examples:
- Auditor issued a going-concern qualification or material weakness disclosure → the audited statement is still rank 1, but lower confidence; surface the qualification before quoting any number from it.
- Tax return is from a different fiscal year than the 10-K → flag the temporal mismatch.

## Output discipline

Never cite at a lower rank when a higher rank is available. If you cite an AI extraction (rank 5) when the same fact is in the 10-K (rank 1), the answer fails the verifier-stack standard.