If you work with a company that’s considering moving forward with an IPO next year, you should check out this Cooley blog addressing five common IPO pitfalls and how to avoid them.  Here’s an excerpt from the blog’s discussion of how to avoid inconsistent financial reporting adjustments:

You may hear us recommending to late-stage private companies gearing up for an IPO to assess their annual and quarterly financial statement closing timeline readiness and begin preparing their audited financial statements as early as possible. The financial statements included in the Form S-1 registration statement must adhere to strict accounting principles and disclosure requirements, and not having them public company-ready can be a source of delay for the IPO. Not only will audited financial statements (and any required acquired company financials) be needed in order to confidentially submit a draft registration statement to the SEC, but also, the accountants will have to provide comfort on all financial information ultimately included in the final prospectus.

Other potential IPO pitfalls addressed in the blog are the challenges of preparing disclosures illustrating potential growth, understated or missing risk disclosures, the use of jargon, and evolving SEC compliance needs.

– John Jenkins