Page 65 - Initial Public Offering - An Introduction to IPO on Wall Street

before new tools are introduced, ideally a year or more before the start of the IPO process.
Areas in which a danger is posed by scalability problems include the following:

Accounting Systems—In the run-up to their IPO, most businesses would need to improve the
capacities of their accounting systems. It is unlikely that systems more appropriate to a small,
private business will be allowed to delay the cycle of closing the books in a timely manner.
The finance role would lack the flexibility to concentrate on value-added tasks if the closing
takes up to two to three weeks per month and won’t be able to fulfill the reporting requirements
of the public business. An inefficient method may also lead to inaccuracies in reporting and
insufficient outcomes review. The enhanced monitoring and reporting standards that come
with being a public corporation often make it necessary to address accounting system problems
during the pre-IPO phase.

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