Start Early and Assess Readiness
Conduct IPO readiness assessments 12–24 months in advance to identify gaps in accounting and reporting, controls, IT, and staffing.
Navigating IPO Complexity
Strategic Guidance for Corporate Controllers and Chief Accounting Officers
Businesses pursuing an Initial Public Offering (IPO) face a transformative journey, with chief accounting officers (CAOs) and controllers at the center of the process. The transition to public company status brings heightened scrutiny, accelerated reporting timelines, and new regulatory demands. Controllers must avoid material weaknesses, build robust internal controls and manage increased workloads – all while meeting aggressive reporting timelines. See how KPMG can help.
Key drivers
IPO readiness and execution present significant challenges for controllers and CAOs, driven by several converging factors:
Material Weaknesses in Internal Controls: 40–50% of IPOs disclosed material weaknesses consistently from 2021–2023, and given rising ICFR scrutiny, this rate is unlikely to decline materially in 2024–2025.1
Inadequate Control Design and IT Systems: Weaknesses in control design, outdated IT infrastructure, and lack of formal policies often delay IPO timelines and increase audit risk.
Accelerated Reporting and SOX Compliance: Controllers must prepare for rapid month-end closes and SOX internal controls, often with limited resources.
Market Volatility and Regulatory Uncertainty: External factors such as market sentiment, interest rates, and evolving SEC disclosure requirements add complexity to IPO planning.
Talent Shortages and Team Consistency: Controllers face difficulty recruiting and retaining skilled staff, impacting the consistency and quality of financial reporting.
Strategic takeaways
The IPO journey is complex and demanding for controllers and CAOs. Early planning, technology investment, and strong governance are essential to mitigate risks and ensure a successful transition to public company status.
Invest in Technology and Automation
Upskill staff to handle tech-enabled workflows and new regulatory requirements. Prioritize automation of financial close and reporting process to reduce manual errors and improve efficiency.
Strengthen Governance and Controls
Build robust control environments and formalize policies to mitigate risk of material weaknesses. Engage with board leadership and external advisors to ensure strategic alignment.
To successfully navigate an IPO, controllers must start preparing 12-24 months ahead by assessing readiness, investing in technology and automation, upskilling staff, and strengthening internal controls. This proactive strategy is vital for mitigating the risk of material weaknesses and ensuring the finance function is prepared for the demands of a public company.
How KPMG can help
Taking a company public introduces significant complexity for CAOs—across governance, controls, reporting rigor, and investor facing metrics. KPMG helps companies navigate every stage with confidence.
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Footnotes
1 KPMG US, 'IPO Material Weakness Study' (2024)
2 CFO.com, 'IPO Controller Challenges' (2024)
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Meet our team
We help navigate the complex challenges of technical accounting, financial reporting, financial integration, and leadership, empowering organizations to thrive.
Shari Mager
Partner, U.S. National Leader, Capital Markets Readiness, KPMG US
Joseph Dineen
Advisory Principal, Accounting Advisory Services, KPMG US
Shari Mager
Partner, U.S. National Leader, Capital Markets Readiness, KPMG US
Joseph Dineen
Advisory Principal, Accounting Advisory Services, KPMG US