2. Overview
Summary of core business areas
Recommendation
Implementation
Estimated Costs
Conclusion
3. Core Areas
Corporate Governance and Compliance
Information Technology
Accounting and Finance
Organizational Structure
4. Corporate Governance and
Compliance
Executives include CEO Job Stevens, CIO Bill Khan, and CPO Matt
Grant
Decision power is heavily centralized in CEO
There is no current board of directors
There is little to no internal audit on CEO
Only one hardware supplier which imposes risk
5. Information Technology
IT controls out of date
No formal documentation of disaster recovery plans
No concise knowledge or IT risks and threats
2 separate networks
Internal network
Customer-facing network
6. Accounting and Finance
One person in charge of internal audit
Lack controls around journal entries
Loose regulation of expense reports, no support staff
Causes delays in reports, which cause inaccurate financial
statements
Lack checklist for financial close process
7. Organizational Structure
Four c-suite executives
Succession plans only for execs
No Information Security Officer
No marketing department
Short-staffed Internal Audit team
8. Advantages of going public
Access new capital and reduce debt
Direct entry to capital markets
Make company recognizable
brand strength and company credibility
Attract, retain, and reward highly qualified employees
stock options, bonuses, other incentives
9. Disadvantages of going public
Expensive and time consuming
Fees and periodic reporting
Loss of privacy control
Reveal highly sensitive information
Can face liability issues
Shareholder obligations
Lose management flexibility
Board/shareholders’ approval
10. Recommendations
Focus on being a public company
Operate like one for at least one year
Fix the financial and HR problems within 6 months
Try to outperform competitors in market
Growth rate, market share, sales performance, profitability
Show that you are strong and stable
Create a long-term business plan
Operational, financial, and strategic initiatives
Covering 2-3 years before and after the IPO
11. Areas of Improvement
Strengthening organizational departments
Creating and implementing financial controls
Forming corporate structure
Ensure proper IT documentation
12. Strengthening Organization
Invest in Internal Audit team outsourcing Staff Accounts Payable
department
Invest in marketing
Create succession plan for department managers
Hire a Director of Security for IT department
13. Implementing Financial Controls
Improve expense reporting
purchase third-party solution
Create controls for approval of invoices
done by Internal audit team
Enforce strict rules on timeliness and accuracy of financial reports
Develop formal financial processes and documentation
14. Forming Corporate Structure
Choose candidates for board of directors
Name a Chief Operating Officer
Will aid in implementing changes
Take care of supplier relations
Enforce auditing of c-suite executives
15. IT Documentation
Invest in IT staff expansion
Launch documentation project
Work with Protiviti IT consultants
Test IT control relevance
Work with Protiviti consultants in internal audit
16. Roadmap of Estimated Costs
1. Departmental Upgrade -----------------$50,000 to $1million
(compensation/ hiring)
Internal Audit staff
Board of Directors
COO
Director of Security
2. One time start up Fees------------------$30,000 to $150,000
Registration
Printing
17. Roadmap of Estimated Costs
(cont.)
3. Outsourcing Costs-----------------------------------$20,000 to $80,000
Marketing Dept.
Internal Audit
IT support
4. Legal requirement Fees-------------------- $50,000 to $150,000
Advisors
SEC
Exchange Listing
Total Estimated Costs = Upwards of $1.5 Million
18. In Conclusion
Improvements needed in
Organizational and corporate structure
IT and financial controls
Solution
Outsource labor for areas not in critical business functions
IT controls
Internal Audit
Marketing
Cost and Timeline
Upwards of $1.5 Million in costs
6 - 12 months to solve critical areas
12 - 24 months until IPO
