An analysis of the accountant's role and legal responsibilities during mergers and acquisitions

Abstract

Purpose: The purpose of this study is to analyse the deal cycle of Mergers and Acquisitions, paying particular attention to the involvement of the accounting firm during the said cycle. This study further attempts to identify the input which the accounting firm may give during the M&A cycle and assess whether such input is availed of in full by the parties to such transactions. Design: The objectives of this study were obtained by virtue of semi-structured interviews both with representatives of accounting firms as well as representatives of local PLC’s which have M&A’s in their recent history, namely in the past ten years. Information was also gathered by reference to relevant published sources of information. Findings: This study ascertained that in the majority of cases, in the case of PLC’s, acquisition strategies are devised internally with little to no involvement from the accounting firm. The accounting firm’s importance takes centre stage post-signing of the Memorandum of Understanding where they are engaged to carry out the due diligence procedure. This is a culture which accounting firms seem intent on changing and with apparent success to date since they already have many clients which involve them as early as the strategy development stage. Conclusion: The conclusions drawn throughout the course of this dissertation are detailed in Chapter 8. Value: It is expected that this study would be an interesting read both for the clients of accounting firms in this context, namely businesses which intend on entering into merger and acquisition transactions as well as the accounting firms themselves. The clients of accounting firms would by virtue of this dissertation be informed of the services which are at their disposal by the accounting firm and the benefits of engaging such during the various stages of the acquisition or merger process. The accounting firms on the other hand would be interested to know their clients perceptions of such services and any preoccupations which they may have when considering engaging the accounting firm.