A $250 million public company acquired a foreign company requiring the first-time audit of five separate entities under US GAAP.
- The target company had never been consolidated or audited; historical books and records were maintained in multiple countries’ accounting principles; the SEC filing required three years of audited US GAAP financial statements
- The target maintained five distinct legal entities and corresponding ledgers, each maintained in a disparate accounting system
- High volume of intercompany transactions with little oversight or reconciliation process
- Company did not have a functioning consolidation model
- Numerous complex transactions required evaluation under US GAAP.
- WilliamsMarston’s team traveled to the UK and worked alongside client management and their external auditors
- Built four unique revenue and cost of sales excel-based sub-ledgers to facilitate the audit and serve as an intermediate bridge until a new accounting system could be implemented
- Completed ten technical accounting memos that were reviewed by the audit firm’s national office, including those for functional currency, consolidation, stock-based compensation, revenue recognition and purchase accounting
- Converted historical records to US GAAP and built an excel-based consolidation model to properly reflect the impact of foreign currency and intercompany transactions
Clean audit opinion issued on the target’s historical financial statements, target’s audited US GAAP financial statements and acquirer’s pro forma financial statements were filed timely in Form 8-K/A.