The situation

A privately owned retailer considered acquiring another large retailer in a different geographical area. The acquisition would open a whole new market and the synergies were significant.

To fund the acquisition, they entered into an arrangement with a private equity partner. The private equity partner was concerned about the integrity and transparency of the company’s systems and controls, and the accuracy of their financial statements.  An audit of the company was sought before any capital raising began.

How we helped

Younis & Co were engaged to undertake the audit, within a tight non-negotiable deadline. This meant preparing the financial statements in a very short time frame. An added complication was several new complex business, accounting and tax issues, created by the company’s rapid growth, that were stretching the company’s internal resources.

First, we educated management on how to ensure that business systems complied with both accounting standards and the private equity partner’s requirements. Once accomplished, we reviewed business systems and processes, highlighting weaknesses and recommending ways to mitigate risks.

Solution

The audit process was completed within the timeframe set by the company and the private equity partner. System issues were addressed to a standard where the private equity partner was comfortable to pursue the capital raising and complete the transaction.

For a confidential discussion on internal and external audit needs, contact Pierre Wakim on +61 2 9683 7888.