Audit challenge: First audit after a private equity acquisition

Challenge details

In the months following a private equity acquisition, countless tasks compete for management’s attention. The financial statement audit might not take priority, but it should: The audit process following a transaction is often new and unfamiliar to a company that has never been acquired before.

That’s the situation this manufacturer found itself in, following its acquisition by a PEG. Its CFO and management needed to adapt quickly – getting up to speed on purchase accounting issues – to avoid potential audit errors and missed deadlines.

Solution snapshot

The first audit after a private equity acquisition requires thorough preparation and orientation. An audit firm plays a central role here by coordinating tasks and communication and by educating stakeholders about how purchase accounting affects financial statements and the audit process.

The Crowe audit team stepped in to share its deep audit experience in both manufacturing and private equity. Crowe leaders took time to orient management and PEG counterparts on technical issues that would affect the audit, such as the valuation of profits interest and the seller note.