Some audit professionals estimate that only 30% of M&A transactions add value, and they want to see realistic projections and a bridge to future performance, according to PJ Patel (Valuation Research Corporation), who has been leading a series of Leadership Roundtables around the country. These roundtables help CFOs, CAOs, corporate controllers, tax directors, and corporate development executives discuss current issues and regulatory pressures faced in today’s deal-making environment.
As far as the auditors’ skepticism is concerned, they “do not want to be involved in a restatement, which most often focuses on deficiencies in documentation, evidence, and controls,” says Patel, who points out these other significant issues:
- Tax inversions—the new Obama administration policy announced in April adds to the already high level of IRS scrutiny;
- Transfer pricing—companies with international operations face significant changes as BEPS reporting comes online;
- New lease accounting rules—rules which went into effect in 2015 will especially affect operating leases;
- Valuing customer relationships, deferred revenue, inventory;
- Reconciling the premium paid in a strategic deal; and
- Pre-deal accretion/dilution analysis.
The Leadership Roundtables are invitation-only events, and three more are scheduled: June 23 (McLean, Va.), June 28 (Palo Alto, Calif.), and June 29 (Denver). To request your pass to attend, click here.
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