If you are thinking about taking your company public in the coming years, you should start preparing far in advance. Why?
As part of going public you will be subject to putting at least two years worth of books and records together in accordance with US Generally Accepted Accounting Principles (”GAAP”). That information must be audited before being submitted to the SEC and available for public observation.
Any auditor will tell you it’s much easier to audit a company when you only have to audit the previous year. Any time the audit period extends two to three years back there are various issues that are generally encountered, including: 1) missing records, 2) turnover in employees, 3) regulatory filings that will require amendment (think taxes), and the list goes on.
If you contemplating going public in the future, start a conversation with all the stakeholders that will be needed: your management team, board of directors, legal, financial consultant, and auditors. Having these groups on the same page will ensure that everyone is working as a team to an end goal. Being proactive in your approach will have better results than if you are reactive.
dbbmckennon is a full service CPA firm with offices in Orange County and San Diego focused on providing quality accounting and consulting services at reasonable rates. For additional complimentary information regarding this topic or other questions you may have please call one of dbbmckennon‘s offices located in Southern California or contact us here.