Stout Survey Finds Internal Controls Professionals May Be Less Prepared for M&A Than They Believe

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Oct 03, 2023, 09:18 ET

CHICAGO, Oct. 3, 2023 /PRNewswire/ -- Stout released compelling survey results uncovering common challenges that internal controls teams may encounter during a transaction, providing an essential resource for navigating the M&A process.

The challenges related to adjusting staffing needs, integrating systems, dealing with internal controls disparities, and documenting and designing business combination controls. The findings emphasize the critical need for a strategic approach to mitigate risks and enhance operational efficiencies by leveraging professionals that possess a comprehensive knowledge of best practices.

"The Intersection of M&A and Internal Controls: A Comprehensive Report" outlined the following themes:

Over 90% of survey respondents believe they are ready for M&A transactions but find that substantial challenges arise with internal controls during the M&A process.
Adjusting staffing needs, integrating systems, and managing internal controls disparities are the three most common challenges, as reported by 85%, 80%, and 75% of respondents, respectively.
While more than 80% of organizations' internal controls teams were involved in assisting with the deal, only a modest 22% of in-house teams were able to offer guidance to key stakeholders regarding effective M&A controls and the disparities between companies.
Approximately 74% of respondents reported that designing business combination controls posed a significant challenge; however, only 36% of respondents included their internal controls team in the lead-up to a transaction.

In partnership with Hanover Research, Stout surveyed 100 respondents recruited via a panel. The respondents were required to meet the following qualifications: Live in the United States; work as a high-level financial decision-maker; have been involved in a merger or acquisition in the last five years; and be at a company that was not acquired from a private equity firm, or if the company was the acquirer, it cannot have acquired an entity from a private equity firm.

"This white paper delivers insights to executives and financial professionals seeking a comprehensive guide to proactively mitigate internal controls-specific challenges they may encounter when undergoing an M&A transaction," stated Jeremy Enuson, Managing Director.

"As we continue to see these challenges overlooked or not prioritized, this resource will empower businesses with the tools they need to navigate the M&A landscape and optimize value realization," added Drew Dodson, Director.

To access a highlighted analysis and insights from the survey, please view "The Intersection of M&A and Internal Controls."

About Stout

Stout is a global investment bank and advisory firm specializing in corporate finance, accounting and transaction advisory, valuation, financial disputes, claims, and investigations. We serve a range of clients, from public corporations to privately held companies in numerous industries. Our clients and their advisors rely on our premier expertise, deep industry knowledge, and unparalleled responsiveness on complex matters. Learn about our Relentless Excellence^® at stout.com.

Stout is a trade name for Stout Risius Ross, LLC, Stout Advisors SA, Stout Bluepeak Asia Ltd, Stout GmbH, MB e Associati S.r.l., Stout Park Ltd, and Stout Capital, LLC, a FINRA-registered broker-dealer and SIPC member firm. The terms "Stout" or the "firm" refer to one or more of these legally separate and independent advisory practices.

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