Tax and Accounting Firm M&A: Performing Due Diligence

Performing due diligence for M&A is a multi-faceted process. There are unique considerations when these acquisitions involve accounting and tax firms. While accountants might be familiar with financial statement audits, performing due diligence is a distinct and often foreign process. Due diligence is the careful process by which you confirm that you are getting what you pay for and are not accepting unnecessary risks and liabilities.

Due diligence should always include financial, tax, operational, and risk assessments. For CPA firms, as well as other professional service providers and service companies; however, their people might be considered their most valuable asset. Understanding the practice niches and billing structure of a target company is critical for buyers, as is the state of the files and working papers. Furthermore, understanding what you can and cannot do to retain employees is also critical. Also, understanding the lack of restrictions on employees that choose to exit the company after the transaction also is critical. For sellers, investing in due diligence could reduce risks and realize a greater selling price. Both buyers and sellers are concerned with the tax implications of the arrangement.

There are steps that acquirers and target firms can take to facilitate the transition. Appropriate documentation and a valuation should be obtained and analyzed, and the tax impact of the agreement on the buyer and seller should be determined. Steps to integrate the companies post-transactions must also be considered.

Listen as our panel of M&A experts explains performing due diligence for tax and accounting firms and offers pre-planning advice to facilitate these acquisitions.

I. History of CPA firm transactions

II. Overview of current trends in accounting firm M&A

III. Strategic objectives for buying and selling

IV. Succession planning considerations

V. Preparing for the transaction (sellers)

VI. Preparing for the transaction (buyers)

VII. Deal structuring and negotiation

VIII. Post-transaction considerations (including equity incentives and the like)

The panel will cover these and other critical issues:

• When to consider an acquisition
• KPIs acquiring firms should consider
• Steps to ensure a successful transition
• Unique M&A considerations for accounting and tax firms

Learning Objectives

After completing this course, you will be able to:

• Target potential companies for acquisitions
• Identify trends in accounting firm M&A
• Determine key documents that should be obtained and analyzed
• Decide when a firm should consider an acquisition
• Ascertain steps to facilitate integration of firms post-transaction

• Field of Study: Accounting
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience, preparing reviewed, compiled, and audited financial statements and the relative disclosures. Specific knowledge and understanding of GAAP, SSARS, and peer review policies.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.