Auditing Acquisitions: Part 1 – Implementing Acquisitions Strategies

First of two articles outlining the role of Internal Audit (IA) in acquisitions activity. The independence and objectivity of IA mean that it can contribute significantly to acquisitions activity, provided it has sufficient organizational status, and business awareness. In screening acquisition candidates, scrutiny of the business environment is as important as the analysis of results to date. The potential “fit” between the prospective parent and the subsidiary should be reviewed, as well as the suitability and readiness of the acquirer to manage diversified activities. Acquisitions provide a “high‐risk, high growth” path and IA should participate as early as possible in preparations for diversification.