Internal controls during M&A transactions has been saved
Perspectives
Internal controls during M&A transactions
How sufficient controls and processes can expedite the deal
Given the importance of merger and acquisition (M&A) transactions, companies typically expend considerable effort on the financial and synergy sides of the deal. What may be overlooked, however, are the proper due diligence, risk assessment, and internal controls needed to assess, record, and integrate the acquired company into the overall financial structure of the acquirer. This could be a differentiator as you define long-term success.
M&A deals consistently involve finances, due diligence, combined advantages and integration. However, it is important to not ignore the value internal controls and processes contribute to a suitable and successful financial merging of the acquired or incorporated businesses, as well as managing the accounting that goes into the original recording of the transaction.
Whether public or private, it is important companies focus on internal controls and processes or they may face concerns from a range of stakeholders including regulatory bodies, shareholders, management, boards and audit committees. That’s why management should have a thorough understanding of the financial, operational, and control-related risks, at both the target and the acquiring entities. Thinking through these considerations before, during and after the acquisition can help facilitate a smoother transaction with reduced risk.
Read the blog story on this, "The importance of internal controls in mergers and acquisitions."
A key call out for Internal Auditors: Read our “Navigating new obstacles during mergers and acquisitions transactions” report, which may be of particular interest to those involved in the smooth execution of M&A transactions, especially as assessors of the governance, risk, controls of the target company.
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The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.
Authors
Contributors
Corrie Sparks |
Ross Hargis |
Jack Dean |
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