How Non-US Accountant can navigate the IPO Process in the US


This post is specifically written for accountants and controllers working within small/medium enterprises, especially those working for the companies outside the US as these often lack the resources and past experience when it comes to the IPO process in the US. The insights herein are shared from the perspective of a pivotal financial figure who steers the financial reporting process: the financial controller or accounting manager, herein referred to as ‘The Accountant.’

General role of The Accountant

The Accountant’s role is multifaceted but includes 3 immediate and key tasks for IPO: (1) the preparation of financial statements and related notes, (2) Supporting drafting of the SEC filings and associated schedules, and (3) assisting with the projections and planning integral to the IPO process. There are also other tasks, but these are not of an immediate importance prior to the successful IPO for a SME entity.

Building knowledge

To enhance their proficiency prior to the IPO process, The Accountant has 2 main options – (1) self-study which involves engaging with resources like SEC EDGAR, reviewing registration statements of similar companies, and familiarizing oneself with the specific content required through forms and guides like the FPI guide by L&W and the IPO roadmap by PwC. Moreover, understanding the intricacies of Regulation S-X, S-K, the Financial Reporting Manual, and Staff Accounting Bulletins is vital for grasping the official requirements, although this material is much more technical.

Regular and early meetings with legal counsel, external accountants, and auditors form the cornerstone of the ongoing process. In particular, even informal communication with these parties to clarify one’s own understanding is recommended.

1. The preparation of financial statements and related notes

Preparing audited financial statements is an essential task, often requiring the group to be in optimal shape to pass a PCAOB audit. This entails ensuring high quality with minimal errors under the specified accounting framework. First and foremost, it’s crucial for The Accountant to comprehend the IPO plan and the accounting milestones. This understanding should be communicated clearly to all involved accountants (and subsidiaries across different countries). Regular checks of the timeline and holding accountants accountable for meeting the milestones are essential practices. Understanding what accounting information needs preparation and how it should be communicated to ensure consistency and quality is pivotal. If there are any reporting packages, the teams in charge need to grasp how they should be filled out early on. Following the collection of financials, The Accountant is tasked with drafting the financial statements. Afterwards, The Accountant should perform a “self-audit”, particularly focusing on significant balance sheet and income statement items before they are presented to the auditors.

The audit itself is another critical area. It’s prudent to prepare robust audit documentation upfront as this can be a time-consuming activity. The Accountant should review accounting policies, update them, prepare position memos on significant items like business combinations, revenue, segment reporting, and convertible debt, and liaise very early with the auditor to understand their audit requests. It’s advisable to be proactive and reach out even before the auditor makes requests.

The audit is a dynamic process, a back and forth that demands understanding and internal communication that this is a high-priority area. At the same time, The Accountant should hold auditors accountable and constructively push them for progress. Regular meetings, perhaps weekly, where outstanding items are reviewed, findings communicated, and the achievement of milestones cross checked against the agreed-upon timeline, are highly recommended.

2. SEC filings and associated schedules

The preparation of the filing documents is arguably the most challenging and perplexing aspect for non-US accountants. Mistakes here can lead to significant delays. However, solid and high-quality financial statements can greatly support this process. The typical issues are that non-US accountants may not be familiar with the applicable SEC reporting requirements and regulations. It’s paramount for an accountant to obtain this knowledge and understand all the applicable requirements to prevent late revisions and unforeseen issues. For example, The Accountant needs to know the number of years for which primary financial statements are required and the type of statements needed under certain circumstances. As an example, The Accountant may find themselves having to prepare not only the consolidated financial statements audited under PCAOB, but due to various SEC requirements also standalone parent financial statements, pro forma financial statements for significant acquisitions, standalone financial statements of significant associates entities, and interim financial statements. Often, these are assessed and understood in meetings with legal counsel, external accountants, and auditors, who all provide advice on the IPO transaction. The accountant must proactively participate in these meetings, ensuring they comprehend everything and double-check their understanding. It’s advisable that these documents are prepared as soon as possible and shared upfront with external accountants and auditors for early review. In preparing these documents, The Accountant can refer to publicly available regulations (e.g., text of the Rule 3-05 on the website) and previously published filings of peer companies on the SEC EDGAR site for reference. Compiling one’s research spreadsheet with how a given issue was addressed in the filings of the peer companies can be incredibly beneficial for the accountant’s understanding of how to approach their own case.

Furthermore, The Accountant’s work is absolutely crucial in preparing various key sections of the filing document itself. For example, in case of F-1 filing, these may include MD&A, Business section, Market & Industry, Risk Factors, and the preparation of summary/select financial data, as well as capitalization and dilution tables. Many of these sections require financial data that is not readily available from the financial statements & footnotes or from the accounting system and can sometimes take a significant time to prepare by The Accountant. Therefore, it’s strongly recommended that The Accountant understand the content they will have to provide within the filing and start preparing the backups early in advance.

3. Assisting with the projections and planning integral to the IPO process

The third significant area relates to the accountant’s support of the financial planning and analysis process, as well as providing various financial analyses and forecasts either to management internally or indirectly to other stakeholders in the IPO process, such as underwriters. External users are generally interested in having financial projections as this is an indispensable part of the IPO pricing process – e.g., metrics related to earnings multiples, cash flows, revenues, etc. In addition, this may not only be the forecasts but also the company’s historical financials compared to past plans with explanations. Accordingly, a company should establish a financial planning and analysis team to put a budget and forecasting process in place. The company should get into the habit of preparing realistic budgets and updated forecasts and be able to articulate why variances have occurred. For an early-stage company, projections and profitability are the most important measures of performance. After a company goes public, budgets and projections will become an important tool for research analysts. Furthermore, this information and a public company’s ability to meet its own earnings estimates and those of the investment community can have a significant impact on its stock performance. Therefore, accurate budgeting and forecasting are critical for a successful IPO, as the market allows little room for error and punishes companies for significant underachievement. The Accountant should ensure that the projections and any such documents do not contradict the financial statements prepared under the GAAP and make some consistency checks.


There are further tasks that are very essential to the process, such as The Accountant’s involvement in setting up internal controls for significant business processes. However, this is not considered an immediate priority area for a successful IPO, given the various exceptions granted for foreign private issuers and emerging growth companies.

While this article has focused only on the key tasks carried out by The Accountant in the SME, it’s important to remember that a successful IPO requires a much broader plan and collaboration between various stakeholders involved, and The Accountant’s role may also extend to operations, participating to some extend in negotiations with investment bankers, legal counsel, and so on.

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