Trusted Advisor: Certified Public Accountant
- Financial Due Diligence: One of the most significant roles a CPA plays in M&A is conducting financial due diligence. This involves a thorough examination of the target company’s financial statements, underlying financial systems, and related records to ensure accuracy and uncover any potential risks or liabilities.
- Valuation: A CPA with expertise in valuation will determine the fair market value of the target company. They use various valuation methods, such as discounted cash flow, market multiples, or asset-based approaches, depending on the nature of the business and the industry.
- Tax Planning: Mergers and acquisitions can have significant tax implications. A CPA helps structure the transaction in a way that is tax-efficient for both parties. This includes considering the tax consequences of asset vs. stock sales, the use of loss carryforwards, and other tax attributes.
- Integration Planning: After the deal, there’s the challenge of integrating the acquired company’s operations, systems, and finances. A CPA can provide guidance on how to best merge the financial and operational systems of the two entities.
- Post-Acquisition Audit and Review: After the transaction, a CPA may be engaged to review or audit the combined entity’s financial statements to ensure accuracy and compliance.
