07.01.15

Audit Preparation for a Provider of Hydraulic Systems

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Business Issue:

Riveron’s client, a private-equity portfolio company, designs, manufactures, and installs turnkey hydraulic systems for the mining and oil and gas industries. In a contemplated transaction, the buyer introduced a late requirement to have an audit completed. A new inventory system had been implemented just prior to the company’s year-end, and accounting records were missing due to a recent a headquarters relocation, which left the required supporting documentation in disarray. This was a first-time audit for the company and its controller was on leave, so we were asked to assist in preparing financials on behalf of the company and fulfilling requests by the auditors.

Riveron Approach:

We immediately deployed a director to manage the controller position, with full access to financials to analyze data and gather all schedules, supporting information and requests required by auditors. Procedures were documented for inventory, purchasing, billing, collections, payroll, and general book-closing functions. Research was performed, and appropriate explanations were provided in advance of the auditor’s fieldwork, to ensure needs were met and fieldwork procedures were performed in a timely manner. Because the client was still working through reporting matters related to their new inventory system, we recalculated data for presentation to auditors and recommended a resolution for out-of-balance issues between the system and ledger for future periods. Since the auditors were not present for inventory count, we also assisted with documentation for inventory rollback procedures.

Benefit to Our Client:

As a result of collecting and analyzing financials and documentation, a smooth audit was enabled for both the client and the auditor. The client was able to take over procedures as soon as the fieldwork for the audit began. Citing our professionalism and support, the auditor referred us to another of their clients.

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