Houston-based Conglomerate Establishes First-time Audit Success via Finance & Accounting Standardization
Overview
The client is a Houston-based conglomerate of companies that own and lease single-tenant office, lab, industrial and manufacturing facilities. Since 2013, they have doubled their square footage as a result of strategic acquisition investments.
Due to the urgency of an upcoming audit, the client’s auditor, BDO, requested the involvement of Bridgepoint Consulting to ensure consistency and quality of information for the upcoming audit.
Business Challenge
The client’s PE firm required a REIT (Real Estate Investment Trust) audit – which had never been conducted before – for a bank covenant by the end of March 2023.
Because it was their first REIT audit, the client was unaware of some of the necessary technical memos, impairment analysis, and roll-forward schedules. Combined with tight internal resources, the client needed support to present the minimum required items on the PBC list.
Approach
The Bridgepoint team began by examining all the properties in detail, including reviewing the rental history, maintenance records, projected revenue and planned expansions to identify potential impairment properties.
After the impairment analysis, schedules and roll forwards were created from scratch and optimized to create greater efficiency in the future. During this process, a financial infrastructure was also established with client input to improve processes.
Next, we brought in Technical Accountants to prepare memos on relevant accounting topics such as Going Concern, Business Combinations, Debt and Equity, and created a well-received ASC 842 lease memo by identifying patterns across the client’s debt structure.
Results
With more accurate schedules, reliable records and standardized procedures, the client improved transparency and reporting of business performance while also meeting their bank’s auditing requirements to achieve operational goals.
Before BPC
- System misconfiguration
- Insufficient REIT audit experience
- Overburdened internal staff
After BPC
- Audit success
- Stronger finance and accounting function
- Enhanced tracking of business performance
Services Provided
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