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Our client decided to pursue a potential sale of its business but recognized that they did not have financial reporting that could be relied upon by potential buyers. The company’s small accounting team had not prioritized accounting in accordance with U.S. Generally Accepted Accounting Principles (GAAP), nor had they performed regular reviews of financial reports. Financial statements were primarily used as the source for tax filings required by the owner.
SolomonEdwards performed a quality–of-earnings review for the client to ensure that the financial statements to be used in the sale process would materially represent the application of U.S. GAAP. As part of this review, we identified areas for improvement that could be included by the seller, whether a sale occurred or not, and assisted with the presentation of the proposed adjustments.
The seller attracted a lot of interest from prospective buyers who relied on our quality–of– earnings report as well as the work performed by their sale advisors. As a result of the strong interest, the client received an increase in information requests and brought us back to assist with addressing these requests, along with guiding them on implementing targeted reporting improvements.