Challenge

A fast-growing consumer electronics technology company, with approximately $100 million in revenue and 100 employees, was navigating a crucial phase of restructuring and rebuilding to support its new strategic direction. The company, having previously raised $60 million in financing, was in the process of seeking additional funding. New potential investors required a thorough audit, but the situation presented several significant challenges:

• The in-house finance and accounting team was new and primarily focused on scaling the business rather than handling complex financial audits.
• There was little to no process documentation, making it difficult to validate financial information.
• Key financial controls, such as backup for posted journal entries, were either lacking or poorly implemented.
• The external audit team had no industry experience, leading to a slow-moving audit process compounded by high turnover within the team.

The company needed an immediate solution to steer the audit process and ensure a clean financial audit to secure future financing.

Solution

ZRG Interim Solutions was engaged to bring in expertise and help navigate the complex audit. A senior consultant from ZRG took charge, establishing a structured approach to the audit preparation and management to create a solid foundation for the business. The consultant facilitated the audit process by:

Audit preparation

• Reviewing all general ledger accounts: Each account was meticulously examined in preparation for the audit.
• Performing comprehensive reconciliations: Detailed, bottom-up reconciliations were conducted for all prior years to ensure financial accuracy.
• Recalculating and formatting large accrual balances: Special attention was given to significant items such as returns and retailer funds, to prepare accurate adjusting entries for a clean trial balance.
• Preparing all Prepared By Client (PBC) items: A corresponding timeline was established to streamline the audit.

Audit management

• Serving as the primary contact for the external audit team, facilitating smooth communication.
• Preparing and reviewing financial reconciliations and schedules: All necessary documentation and schedules were created or refined for the audit.
• Coordinating meetings between the external auditors and internal stakeholders, ensuring alignment and transparency.
• Managing ad hoc audit deliverables: As the audit scope expanded, new requirements were addressed promptly.
• Escalating concerns and resolving issues: The consultant provided escalation support and facilitated the prompt resolution of any issues arising during the audit.

Result

The senior consultant from ZRG Interim Solutions successfully guided the company through a complex audit process, resulting in a clean audit and solid financial statements. This provided the company with a strong financial foundation, putting it in an excellent position to secure the additional financing needed to support its growth and strategic goals. ZRG’s intervention was critical in bringing much-needed expertise, effectively managing the audit process, and establishing the financial transparency required for future investor confidence.

Navigating audits and ensuring financial readiness in high-growth environments can be daunting. ZRG Interim Solutions specializes in providing the expertise and leadership needed to manage complex financial challenges. Whether you’re facing an audit, restructuring, or scaling for growth, our team is ready to help you build a solid financial foundation. Contact us today to learn how we can support your strategic goals and drive your business forward.

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