Acquisition Leads To A Need For Purchase Accounting And Restatement To Create New Company

Client: Small Private Software Publisher
Requirement: Staff Augmentation - Accounting

Business Situation

The client is a small privately held software publisher in Rochester, NY. The client had a vision to create the number two company in telecom expense management. To help achieve this vision, the client acquired three prominent telecom companies. As each of these companies used various systems to record journal entries and to obtain financial statements, it was necessary to implement one primary accounting software. The client eventually implemented NetSuite as their primary accounting software; however, they were very behind and in need of a strong team to come in and reconcile the various financial statements so they could complete their audit.

ProNexus Solution

ProNexus was engaged by the client to provide Loan Staff Augmentation, assigning two Senior Accountants with industry experience to perform Audit Readiness. This involved pulling together a view of all accounts by each acquired company in their original systems, and rectifying these against the designated mapped accounts in the General Ledger System that was to be used going forward. ProNexus also compiled information to complete the purchase accounting treatment for the previous 2 years. ProNexus reconciled all accounts, which occasionally required recreating support documentation from the available data, and prepped audit-ready documents for the previous 2 years. As no bank reconciliations were found for one of the newly acquired companies, ProNexus also helped to recreate these documents. In addition, ProNexus made itself available to provide additional support and guidance to the client’s in-house auditors.

Through our reconciliation of the client’s various financial statements, ProNexus discovered the lack of support existing for the accounting in the previous year was due to staffing changes and moved or changed operations. Due to this discovery, the client requested ProNexus extend its engagement for an additional 4-6 weeks, in order to finish reconciling all of the accounts through December of the previous year. Once the financial records were updated and reflected the purchase accounting treatments chosen, the client was ready for their previous year audit.

Post by Kaitlin Alfvin

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