Contributor:
Mollie Carroll, Senior Manager, Risk & Accounting Advisory Services
Amidst the rising cost of debt and the recent Securities and Exchange Commission’s (SEC) crackdown on special purpose acquisition transactions (SPACs), there has been a notable uptick in the number of companies looking to execute initial public offerings (IPOs).
For many companies, the switch from being a privately held company to publicly traded company represents the start of a new era of prosperity and growth. But it is far from an overnight process. No matter the companies’ size or industry sector, going public requires considerable planning and preparation across the organization and the full breadth of the accounting function.
Starting Off on the Right Foot
The best way to kickstart this process is by partnering with an experienced third-party advisor to conduct an initial IPO readiness assessment. This will determine exactly where your organization is on its journey towards being ready to list on a stock exchange — and what still needs to be done to get there.
For example, you may find you do not yet have the financial controls and/or processes in place to comply with the Public Company Accounting Oversight Board’s (PCAOB) standards for publicly traded companies. These are far more stringent than the American Institute of Certified Public Accountants (AICPA) rules for private companies and are closely scrutinized by the SEC.
Engaging in IPO readiness services to identify these gaps in the ‘PCAOB uplift’ will help your organization mitigate the risk of any violations of SEC regulations further down the line.
When performing an IPO readiness assessment, we often start with the accounting basics, including analyzing the company’s policies and procedures, chart of accounts structure, most recent draft of financial statements, and trial balance. By analyzing these foundational accounting items, we can determine the amount of time and effort that will be dedicated to the PCAOB uplift process to ensure IPO readiness.
Timeline of Strategic Considerations for IPO Preparation
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12-24 Months Prior to the IPO |
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6-12 Months Prior to the IPO |
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How Cherry Bekaert Can Help
The readiness assessment is just the first step to a successful IPO, and our accounting advisory professionals can help CFOs and controllers see the full picture of their organization’s journey to going public. Because of our size and scale, we can bring you the right people, with the right experience, at the right time. Our accounting professionals can support you on everything from technical accounting, transaction-based accounting to broader services such as digital transformation.
Working with Cherry Bekaert solves another frequent problem: a lack of knowledge, resources and bandwidth within the business. Many in-house accounting teams currently find themselves overstretched and understaffed, meaning that overseeing the various tasks involved in going public can be extremely challenging and burdensome.
Our co-sourcing approach involves experienced CPAs at every stage of the journey — from plugging gaps in capacity or capability to managing the various internal and external stakeholders. This, in turn, ensures nothing falls through the cracks and frees up your in-house team to focus on the other key day-to-day elements of their job.
Cherry Bekaert can help management set a clear and realistic IPO process timeline and IPO readiness checklist to prepare and execute your IPO. Many companies take as long as two years to deliver from beginning to end, while even the quickest tend to last a few months. The most successful IPOs are therefore the ones that are viewed as a holistic, long-term process of change, rather than a single transaction. The rewards of going public can be considerable. It is worth taking the time to get yours right.
Related Insights
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- Podcast: 2023 Year-End SOX Compliance Considerations
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