Post IPO—Day 2 and beyond

Common challenges:

• Many post-IPO companies aren't ready for the rigor that comes with a Public Company Accounting Oversight Board (PCAOB) audit—a requirement for every public company that puts increased demands on the CFO and accounting team.
• It is important to have a rigorous and timely close process that outputs accurate financial reporting and disclosures in a timely manner to meet SEC filing deadlines as well as quarterly earnings for the investing public.
• Preparing 10-Q and 10-K filings requires rigor to collect and compile accurate business data, prepare financial statements and disclosures in line with guidance, review the drafts, and share them with the public—and may mean accelerating your quarterly and year-end close calendar from what you may be used to.
• Companies will likely need to define and implement accounting policies and benchmarks, which may place additional demands on the finance/accounting organization.
• CFOs may need to integrate key functions, including investor relations, financial planning and analysis, and accounting and reporting.

Our services:

Technical accounting and reporting services, including:

• Technical accounting and reporting advisory services that cover the gamut of technical accounting matters as well as SEC reporting and disclosure drafting
• Implementation of new accounting standards

Common challenges:

• The establishment of an effective governance structure including the process of standing up committees, developing agendas, calendars, charters and other documents as required by the SEC and Listing Exchanges.
• Enterprise risk management (ERM) is central to all governance structures. Companies should focus on developing an effective risk management system and assigning oversight and operational responsibilities to both board and management owners, respectively.
• As a company goes public, oftentimes there may need to be continued changes in the board composition depending on the investor makeup before and after the IPO. Companies should continue to focus on the full development of the public company fiduciary board - the identification, recruitment, election and onboarding process for new board members.
• As a newly public company, you will need to decide on
  • Board and committee structure
  • Board and committee meeting cadence, agendas and continuous evolution of effective board materials
  • Updating Corporate Governance Guidelines and engagement with company shareholders
  • Investor relations practices

Our services:

To advise you on establishing and implementing effective governance policies and practices post-IPO, our corporate governance services include:

• Continuing board or board committee education
• Board and committee governance review services
• Current governance insights on hot topics (e.g., AI, cyber, ESG, talent)
• Committee requirements
• Board skills matrix preparation and analysis
• Sample committee charters, calendars, agendas and self-evaluations
• Investor relations planning and preparation, including activist preparation
• Board and committee labs

Common challenges:

• A post-IPO company can be subject to more complex tax requirements, specifically related to the company's tax provision.
• Companies that used to operate in passthrough tax status may become part of an umbrella partnership corporation or Up-C structure—when a new corporation acquires and holds an interest in a target partnership with both entities remaining which requires income tax provision calculations for the new corporate entity. The Up-C structure may include additional complexities, maintenance, and reporting requirements around tax receivable agreements between sellers of the partnership interests and the public corporation.
• An IPO may lead to potential limitations on tax attributes, such as net operating losses and credits, as well as public company limitations on executive compensation deductibility.
• For multinational entities, ongoing sustainment means assessing strategies around intellectual property ownership, value chain alignment, and transfer pricing.

Our services:

We can assist newly public companies in re-examining their tax structures, including:

• Executing on Up-C strategy, operating model and future calculations
• Developing and documenting tax risk management policies and controls
• Tax provision services (a combination of process and tax accounting technical capabilities to drive the delivery of valuable insights that can advise on mitigating risk and identifying potential opportunities) and accounting policy documentation
• Global direct and indirect tax compliance
  

Common challenges:

• The types of cyber attacks that your organization is at risk for often changes post-IPO due to higher consequences when certain parts of the business are more visible to the public (and thus to attackers).
• Your organization's ability to protect data and maintain operations after a cyber threat is discovered can impact your business operations and value.
• Because cyber threats are always evolving, protocols must be robust and keep in mind the expanding risks.

Our services:

As a first step, we can advise your company on understanding current vulnerabilities. By performing a cyber security assessment that includes components such as application and network security, threat intel, and software vulnerability, we can assess your organization's cyber posture and hygiene. From there, we can begin the process of building defenses and recovery plans.

Common challenges:

• With new requirements, you may need new or additional resources focused on internal audit and SOX compliance
• Implementation of Enterprise Risk Management (ERM) systems

Our services:

To assist you in improving your organization's people, processes, and technology, we offer:

• Guidance implementing internal controls over financial reporting (ICFR) and establishing an organizational tone positioning ICFR as a business imperative.
• Defining and establishing a SOX program, including post-IPO operating model.
• Cosource arrangements, which includes executing a risk-based strategy.
• Establishing your monitoring function (e.g., internal audit), including the development of organization and procedures.
• Optimization and modernization through technology considerations, including ERP transitions and digitization of controls.
• Recommendations on ERM systems.

Common challenges:

As a newly public company, you should explore opportunities to automate processes to meet the growing demands of your accounting and reporting function.

• Before going public, many organizations have limited information technology (IT) organizations and capabilities in place and need to evolve this function after their IPO. This can work against efforts to implement leading practice controls and access policies.
• Your organization will likely need added resources and capacity to support business growth and new demands post-IPO. IT systems should be designed to scale to handle the increase in data and transactions.
• Rapid growth and limited resources may result in a reliance on data systems that evolve organically, adopting tools and capabilities without a consistent focus on access control, change management or integration/ automation tools.

Our services:

Enterprise resource planning (ERP) systems are information enablers to finance, human resources, and operations—especially when seeking greater performance and sustainable growth. We can advise you with selecting and implementing the appropriate scalable ERP system. Our services include:

• Building and implementing cloud-based software-as-a-service offerings to assist your business in benefiting from digitization.
• Transformation of the close, consolidate, and report processes powered by technologies offered through robotic process, automation, Blackline and Workiva.
• Use of data visualizations to enhance real-time reporting and FP&A functionality.

Common challenges:

• For newly public companies, ESG disclosure becomes more important as global regulators react to investor-led demand for more transparency and ESG performance data.
• As many ESG standards and frameworks mandate disclosure on how those charged with governance and those in management react to and manage sustainability risks, newly public companies should begin by outlining their strategy pre-regulatory requirement for disclosure.
• Assess whether your company should make sustainability strategy changes to align with stakeholder and investor expectations, prior to being required to disclose it.

Our services:

We can advise you on how to prepare for a fast-moving and complex ESG landscape by:

• Dentifying relevant ESG topics, risks, and materiality levels
• Developing your sustainability strategy
• Developing an improved and integrated ESG governance structure
• Advising with reporting, including regulatory and voluntary
• Establishing data, processes, and controls for regulatory reporting, including technology enablement
• Integrating ESG into your investor relations (IR) strategy and communications for capital markets community