When a rapidly growing multi-cancer early detection blood-testing company sought to complete their first Big 4 audit and go public within six months, it faced a number of challenges:
- The newly formed business had acquired strategic in-process R&D assets through a business combination.
- Its lean accounting team had not previously experienced a PCAOB Audit (or worked with Big 4).
- Management was aggressively and simultaneously planning for several transformational financing events (IPO, SPAC, and M&A were all possible).
- Quickly hiring the right talent that would carry forward to the expected future state was challenging.
CrossCountry Consulting was engaged for expert technical accounting guidance, public-company readiness, and CFO support while keeping the company agile to multiple concurrent strategies.
To start, CrossCountry Consulting identified a team of helpful experts in the industry who were familiar with auditors’ expectations and public company regulations. This team worked closely to understand the current state of the company and swiftly established and executed a project plan addressing the multiple risks and goals of the company.
We collaborated with management to determine priorities for all stakeholders and aligned those projects to maximize the use of talent on the finance team with the right CrossCountry consultants. Audit readiness, close optimization, and public-company readiness were critical workstreams for which CrossCountry was responsible – combined with overall project management and reporting to C-Suite.
This framework allowed the client's lean accounting team to focus on daily operations.
To prepare for the initial audit of the company, we provided technical accounting support which included:
- Preparation of audit-ready white papers on Business Combination, Accounting Standard Adoption of ASC 606 and ASC 842.
- Establishing accounting books and records for Stock-Based Compensation, Related Parties, Accrual Accounting on Clinical Expenses.
- Compiling third-party evidence to support projected financial information used in certain valuation models and other forecasts subject to audit.
- Drafting financial statements.
- PMO of Audit.
As part of a wider public-company readiness effort focused on finance, we led improvement efforts to reduce days-to-close and establish reporting processes, which included:
- Establishing a repeatable close process.
- Identifying estimation opportunities to eliminate the current state “continuous close cycle” to low double-digit days.
- Introducing benefits of technology upgrades on ERP, budget, close, and procurement.
- Establishing quarterly close and reporting procedures.
- Maintaining SOX mindset when creating standard form reconciliation tools and templates.
- Coordinated with FP&A to quickly prepare insightful reports during the transaction.
Following the transaction, team members of CrossCountry continued to support the Controllership in standing-up key finance processes that were established to help stabilize the company during the transition.
The company was moving at warp speed and CrossCountry was able to provide the right people at the right time to give finance lift, helping them to achieve many competing deadlines and keep stakeholders satisfied. This enabled the company to:
- Establish trust with investors by consistently hitting all deadlines regardless of how aggressive they were.
- Demonstrate technical competence and command over finance functions with auditors.
- Swiftly analyze, review, and report key financial information.
- Go public.