Becoming a Public Reporting Company: Things to Know

Becoming a Public Reporting Company: Things to Know


As companies prepare to become public, they face more challenges from shareholders and regulatory bodies than ever before. The Sarbanes-Oxley Act (SOX) and increasing corporate governance demands have placed a sizable burden on already lean organizations. Additional regulatory reporting requirements and accelerated reporting timelines only exacerbate the problems. With all of these competing demands, how can you ensure your organization is prepared to transition from a private to a public company?


Public company readiness is frequently underestimated by the board and management and can create a significant distraction amid day-to-day business activities. Preparing a company for an initial public offering (IPO) or a public debt offering can be a complex and daunting task for even the most well-rounded, professionally run organization.

Management not only needs to select and assemble its IPO team of investment bankers, legal counsel, auditors, consultants, financial printers and other experts, but also must undergo an often painful due diligence and review process by the various IPO team players. While every player adds value to the process, each needs to ascertain whether or not the organization is “ready” to become a public company. It is not surprising that the IPO process can often overwhelm an organization.

Challenges and Opportunities

Whether you are a small or large organization that is contemplating the possibility of going public, or you have invested in companies with potential for an IPO, you likely are looking for answers to these and other critical questions:

  • Can we meet the reporting timelines required by the SEC?
  • Can we effectively manage the complex accounting and disclosure requirements?
  • Is our IT infrastructure scalable to handle our growth and properly controlled to meet increased regulatory requirements?
  • Does the data used to manage and report our results have integrity?
  • Are our key business processes and controls mature enough to handle the rigor of outside scrutiny, generate financial results accurately and timely, and not impede anticipated growth?
  • Do we understand the SOX requirements? How do we prepare to comply?

Today’s public market windows open and close quickly. This requires potential IPO candidates to be prepared when the market is favorable. Inadequate public company readiness assessment and planning can delay an offering or adversely impact the enterprise value.

Our Point of View

A structured and comprehensive assessment of a company’s readiness is essential when contemplating an IPO. Without an assessment of readiness as well as a comprehensive plan to address shortcomings, pre-public and newly public companies face the risk of not achieving the following:

  • Accurate Financial Reporting – Companies need to ensure they have the requisite skills to understand the application of complex accounting principles for accurate financial reporting.
  • Efficient Financial Close – In order to meet SEC filing requirements, companies must ensure they have an accurate and efficient financial close process.
  • Appropriate Corporate Governance and SOX Compliance – Ensuring the company has a robust regulatory and corporate governance understanding as well as an efficient internal control environment is critical to achieving initial and ongoing compliance with SOX regulations.
  • Scalable IT Environment – Reviewing the IT system environment to ensure the company is able to handle the growth of the business is imperative for a public, or soon to be public, company.


How We Help Companies Succeed

Our Public Company Readiness practice helps companies assess whether they are prepared for an IPO. We help clients create and execute a plan to optimize the capabilities of each organization, including its internal processes, human resources and information systems, for both a successful initial offering and subsequent operation as a public company.
With years of experience providing IPO readiness assistance, Protiviti has developed an approach that effectively identifies key areas of focus. We provide specialized services to fit your needs, whether they include S-1 financial reporting assistance, process/control remediation or systems enhancements. Our objective is to help IPO candidates save time and money, as well as increase the likelihood their IPO will be successful.


A fast-growth technology concern was looking to an IPO as a potential source of capital and an exit strategy for its founding investors. The existing management team had not experienced the IPO process and was unaware of the company’s state of readiness. Additionally, the company’s accelerated growth required that management’s focus remain on sales, marketing and product development efforts and not get inappropriately distracted “fighting fires” related to shortcomings with financial reporting infrastructure and SOX-related compliance issues.

Protiviti’s Public Company Readiness practice was able to quickly assess the situation and, working with management, help create a clear understanding of the gaps and a detailed project plan outlining the timeline, resources and milestones to facilitate the company’s IPO filing.

Our client was able to approach its board, investors, professional advisors and employees with a clear vision and action plan. We helped execute the plan working alongside all constituencies and helping the client achieve its public offering. At the conclusion of the project, the corporate controller for our client commented, “With their knowledge, experience and effective project management, Protiviti helped us get ready for a successful IPO.”


Jim Aerni
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Mark Schaffer
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Gary Callaghan
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Charles Soranno
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Steve Hobbs
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Gordon Tucker
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Danny Rudloff
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