Internal audit can add value to the M&A life cycle

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Most organizations understand the value internal audit can bring once a deal has closed.

Internal audit provides a critical perspective to M&A deals.

What they do not often know is the value internal audit can provide before the transaction process is even under way.

Strategically, internal audit can determine an organization’s readiness for a merger or acquisition. During due diligence, the function can alert the organization to potential risk, control, governance or regulatory issues that would cause the organization to overpay. Prior to deal close, internal audit can help prevent deal value leakage.

From a post-acquisition perspective, having internal audit involved in critical components of the integration can preserve organizational synergies and ascertain proper control monitoring of new or changes in processes. Finally, throughout the M&A life cycle, internal audit can audit the management of the program to promote the use of leading practices throughout each stage of the deal.

Internal audit provides a critical perspective to M&A deals that many executives may not consider. Without that perspective right from the start, the organization could find out far too late that it paid too much for its acquisition — or that it has to spend a significant amount of money to fix issues that internal audit could have identified and helped the organization avoid.

 


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