From Private To Public: Timing, Audit Readiness, And CFO Strategy

Audit readiness plays a significant role when a company decides to go public. Whether you're pursuing an initial public offering (IPO) or have been approached to enter into a SPAC merger, financial readiness—to be ahead of audit staleness dates, meet filing timelines, and getting final SEC approval—is not only imperative, but can be the difference between success and failure as a public company, especially in the first two years of trading.

I recently joined CJ Gustafson on Run the Numbers to discuss the nuances of taking a company from private to public, SPAC and IPO trends, and the evolving role of the CFO throughout a capital markets journey. Listen to the podcast episode here, and read on for key takeaways on the critical role CFOs and finance leaders play in enabling smoother execution and strengthening investor confidence.

Building the Foundation for IPO and SPAC Readiness

Taking your company public is a complex and time-sensitive process that starts 12-18 months before the intended IPO event and represents one of the most significant milestones in your company's evolution. By contrast, companies approached for a SPAC merger often have only several months to uplift their financial operations and reporting infrastructure, putting substantial pressure on the office of the CFO and the ability to complete PCAOB audits and forecast reliably. If you rush it, the downside is severe. Regardless of the path, both IPOs and SPACs rely on credible, complete, and audit-ready financials to maintain momentum, protect optionality, and support valuation.

I identified critical readiness thresholds that your company must meet before going public, and they are as follows:

• Completed PCAOB-compliant audits: Your company must have financial statements audited under PCAOB standards, which require greater rigor, documentation, and auditor independence than private-company audits.

• Sufficient audited financial history: Your company must provide two or three years of audited financial statements, depending on status and structure, with all required periods fully completed before filing.

• Ability to withstand SEC review: Management teams must be prepared to respond to multiple SEC comment cycles addressing accounting policies, disclosures, and financial presentation.

• Public-company quality financial reporting and controls: Organizations need repeatable, well-documented reporting, and internal control processes capable of supporting quarterly public reporting.

• Clear, supportable financial disclosures and forecasts: Disclosures and projections must be based on defensible assumptions and aligned with historical results to maintain regulator and investor confidence. These will often include non-GAAP measures and other KPIs that must stand the test of time.

The takeaway is clear: invest early in audit infrastructure. Companies that go public without full readiness risk missing early quarters, which will damage equity value, cause meaningful harm to investor trust, and delay future access to the public markets. Going public is a complex, enterprise-wide effort, and Riveron's ability to support every pillar of readiness was a key reason I was drawn to the firm. We often start with an IPO readiness diagnostic—a rapid assessment of current state versus public company requirements—and then deliver tailored solutions to meet requirements and deadlines in partnership with key business functions and stakeholders in an organization.

Additionally, take a look at the six challenging points on the path to IPO that accounting and finance teams should consider to prepare for the incremental work and expertise required.

Read more about engaging experienced capital markets advisory experts to pave a smooth path toward an IPO.

The CFO's Role Transformation on the Path to IPO

Preparing a company for public markets requires more than increased reporting and sharper quarterly forecasting; it demands a fundamental mindset shift from the C-Suite and Office of the CFO, which can take a year or more. As a private company, there isn't nearly the same pressure to underpromise and overdeliver, in fact, it is often the opposite, especially for venture and growth equity backed companies. As a public company, where the average institutional investor has 100% liquidity and much shorter investment horizons than venture or private equity, the relationship with your new shareholders becomes one of trust and consistency, and it is the CFO who is most often responsible for building that ethos. As I mentioned in the podcast, "The CFO is the steward of capital for the company. The relationship with investors is built with the CFO."

For a CFO to be effective on the path to an IPO, you must embrace transparency and consistency to communicate results. Strategic storytelling becomes paired with factual accuracy, because going public is not just a financing exercise, it's a credibility exercise and a transformational branding exercise. Your numbers and guidance help shape your narrative, and the market watches every step.

I discussed the mindset shift CFOs need when preparing your company for an IPO or dual-track process, and here are the main takeaways:

1. Shift from private to public scrutiny: You move from managing financials for a limited, trusted audience (founders, private equity, VCs) to presenting credible, verifiable information to regulators, analysts, and the broader market.
2. Embrace transparency and consistency: Every metric and disclosure must be accurate and defensible. In addition, you must ensure that communication is clear, consistent, and credible.
3. Focus on credibility over flexibility: Unlike private company settings, assumptions and forward-looking statements are heavily scrutinized in public markets; you must prioritize evidence-backed reporting.
4. Ownership of governance and controls: You must ensure multi-year audits, PCAOB readiness, internal controls, and compliance frameworks are solid, demonstrating organizational reliability to investors and regulators.
5. Strategic storytelling grounded in data: Financial narrative and investor communication must combine storytelling with factual accuracy; the market watches every step of the company's reporting and projections.
6. Balancing short-term performance with long-term value: The best public companies see around corners to prepare the markets for change and message calmly, while continuing to focus investors on the long-term value proposition.
7. Adopting a public-market lens in decision-making: Decisions are made with awareness of how investors, analysts, and regulators will perceive them; this includes anticipating potential scrutiny and preparing for SEC comment cycles.
8. Investor confidence as a core responsibility: The CFO acts as an architect of market trust, ensuring that the company demonstrates reliability, transparency, and readiness across all financial and operational dimensions.

Audit readiness is a clear indicator of financial discipline and a critical driver of optionality, valuation, and long-term success. Companies that invest early in audit infrastructure, governance, and financial controls position themselves for smoother IPO execution and stronger investor confidence.

Insights to explore next:

• The Role of Accounting When Preparing for an IPO

• Preparing for an IPO? Make Finance and Accounting Stronger

• Is Dual Tracking an Option in Your Company's IPO Strategy?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.