You are going through an M&A transaction and wondering, “What are the top 5 mistakes to avoid, from a SOX internal controls perspective?”
I suggest you watch the video. It’s easier to understand if you are a visual/audio leaner. The content below is the same as the video. It’s for those who learn by reading.
Get it in writing
It is always important to get written documented approval. A secretary will take minutes at a board meeting, so these discussions and decisions are easy to document. But there can be less formal discussions that occur, and these need to be documented as well.
If a CEO or CFO is approving something, it must be in writing. This does not have to be a formal document or memo – an email will work.
Are approvals within authority limits?
Organizations may have different rules, but typically there is a dollar threshold for the size of an acquisition an executive can approve e.g., acquisitions over five million dollars require the CEO’s approval, or those above one million dollars require the CFO. Make sure you get all of the approvals needed for your transaction, up and down the chain, and make sure they are in writing.