Mergers & Acquisitions Support: The Strategic Role of Internal Audit in Mergers & Acquisitions

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The Strategic Role of Internal Audit

Mergers & Acquisitions (M&A) have distinct phases of activities and present a variety of risks within each phase in the M&A process.  Organizations need to manage the risks involved through all phases of the M&A process.  Internal Auditors are not M&A strategists, but excel at risk assessment and risk management.  Internal Audit can play a critical, proactive and consultative role in a successful merger or acquisition throughout every phase of the M&A lifecycle.

Whether you are thinking of a potential merger or acquisition or already in the process of an M&A, here are some important questions we can help you answer:

  • Do you have the right team in place to evaluate the targets?
  • Is all of operational management involved in the process?
  • Have you given more importance to the advice of external advisors rather than your own managers?
  • Does the proposed merger or acquisition comply with regulatory agencies?
  • Do the negotiators understand the benchmarks and company risk appetite?
  • Are there environmental risks hidden in the selected target?
  • Are the deal-makers more concerned with closing the deal than whether the target is a good fit with acceptable risk?
  • Were steps missed or overlooked during the negotiations or deal structure?
  • Do accounting rules or preferences drive the payment method instead of growth or risk considerations?
  • Have key employees with the most knowledge been identified and measures been taken to retain them?
  • Were employee roles and the organizational structure defined early on?
  • Were key elements missed or not given value during the initial risk assessment? 

Risk Management experts can help assess the strategic risks of M&A activities.  Contact us to provide insight as to how Internal Audit can add significant value throughout the M&A process.