Prevent Increases in Audit Fees During Mergers and Acquisitions
Does your company have plans to undergo a merger or acquisition in its future? If so, you may face an increase in auditing fees, writes David McCann for CFO.com. In looking at the list of the organizations with the top 10 audit fee increases for Fiscal Year 2016, six were identified as having recently merged with or been acquired by another company.
The company which experienced the largest increase in audit fees, was analyzed in-depth by CFO.com.
In fiscal year 2016, the company, which provides Medicaid and Medicare health plans, saw its audit fees triple. The increase was accompanied by a 78% surge in revenue, from $22.8 billion to $40.1 billion, as the company completed an acquisition and experienced strong organic growth.
A merger or acquisition can be a very difficult time for your office of finance. New people, new policies, new procedures, new and increased reconciliation volume – the list of possible complexities and areas where mistakes might be made is nearly endless.
CFO.com also identified weak financials as a likely contributing factor to audit fees increasing for several of the other top-10 audit fee increases in companies that didn’t undergo a merger or acquisition. Weaknesses in the Record to Report processes cost certain companies millions in audit fee increases.
Whether your organization is undergoing a merger or acquisition, or simply unsure of the strength of your controls, it’s important to consider what solutions may be out there to prevent this issue. Automation and innovative solutions like Risk Intelligent RPA™ will prove invaluable as you handle both internal and external audits, evaluate your financial controls, ensure SOX compliance and more. Trintech is the only Financial Corporate Performance Management (FCPM) technology provider with a dedicated compliance solution.
See CFO.com’s post for the full breakdown of the top 10 audit fee increases and the factors that led to those increases.
Written by: Sam King