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LARGE CASUAL DINING CHAIN CASE STUDY
Embark delivered skills and support to help the client become PCAOB audit-ready
Introduction
Navigating public entity status can quickly become a minefield if you don't know the terrain. That's the predicament a popular restaurant chain found itself in, contacting Embark for some much-needed accounting know-how and strategic support for its IPO prep and process.
Our Solutions
Embark's Capital Markets, Accounting & Reporting, and Outsourcing & Team Continuity solutions were indispensable in helping the restaurant chain navigate its public transition.
Index
The “Big Wins”
1. Successfully converted the company from QuickBooks to a more comprehensive ERP to better support its rapid growth
2. Reviewed several material acquisitions going back years, addressing all technical accounting issues along the way
Our clients are happy. We’re happy. Everybody’s happy.
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We have had great experience with highly competent people in all projects we have engaged them for. In my experience the competence of the folks has been hard to replicate consistently with other companies.
Melanie Merritt, Corporate Controller of Helmerich & Payne, Inc.
The team is on top of it. They have been understanding and flexible with pricing and timing the engagement. The team, at all levels, is very competent in regards to the project. They stay in constant communication and engage us in a very personal yet professional manner.
Terry Nwosuocha, CPA - Senior Director of Financial Reporting & Accounting of SecurityScorecard
Amazing supportive attitude supported by a deep and broad knowledge and skill. Our requirement is always 1000% fulfilled by Embark team.
Bruce Suzuki, Lyseon North America Inc. (LNAI)
Embark sends the best people, so much so that it makes us think that these people grow on trees. We know they don't and we are grateful for all Embark does for our team.
Brandon Walls, CPA - Vice President, Controller of Ashford Hospitality Trust
Executive summary
As the client, a popular casual dining chain, prepared for a future as a public entity, management realized the company lacked both the technical accounting experience and bandwidth to fulfill its many requirements and meet critical deadlines. At the recommendation of its Big 4 auditor, leadership contacted Embark for essential accounting team continuity and expertise.
About the client
Since opening its first location over 50 years ago, our client has consistently grown to become one of the most recognizable international brands in casual dining. The PE-backed company has nearly 900 locations spread across 60 countries.
Challenges & objectives
The restaurant chain’s team didn't have the public company experience to draft key disclosures in the financial statements or address specific areas in the proxy statement for its SPAC transaction. This coincided with time-sensitive issues in meeting new guidance requirements and accounting for recent acquisitions. Between auditing and reporting demands, a shortage of talent, and other key accounting concerns, leadership developed a series of objectives to help the company address these often overwhelming challenges:- Team continuity in key areas, particularly technical accounting
- Complete the SEC reporting requirements for the proxy statement filing
- Restate 2018 annual financial statements to comply with public company disclosure requirements
- Address transactional reporting issues stemming from several acquisitions over the past two years that impacted 2019 financial reporting and required SEC filings
- Streamline its accounting and reporting procedures for a compressed timeline
- Evaluate revenue recognition procedures & documentation according to ASC 606 guidance
- Finalize requirements for its PCAOB audit
How Embark helped
By the time our client engaged Embark, time constraints and tight deadlines had become a significant concern. We began our work by level-setting all outstanding requirements and issues, establishing a preliminary timeline for the different projects and prioritizing them by importance. Embark was instrumental in several ways while helping leadership both understand and meet public company reporting requirements and shoring up its accounting function:
Public Company Reporting & Transactions
- Updated its financial statements, including all required disclosures for public companies
- Drafted the management’s discussion and analysis (MD&A) section of the proxy statement to address the back transactions, as well as required SEC pro forma information for the SPAC
- Addressed and resolved all questions and needs from auditors regarding past transactions
- Completed several ad hoc projects as they arose, including SEC & US GAAP financial reporting checklists, technical accounting memos, accounting guidance for stock compensation transactions, pro forma financial information, and long-lived asset impairment testing
Accounting Support & Process Improvement
- Verified and documented the reasonableness of the inputs used in its valuation reports, while also guiding its team on the correct accounting for their acquisitions, and documented technical accounting memos for management and their auditors
- Provided accounting team continuity so its in-house team could focus on the financial close, reporting, audit requests, and other standard processes
- Reviewed previous conclusions by the company on applying ASC 606 to ensure accuracy before providing revenue recognition memos to the auditors
- Functioned as a conduit between management, auditors, tax & valuation specialists, legal counsel, and other outside parties
- Completed several ad hoc projects as they arose, including revenue & AR business process flowcharts
Results: our client now has a footing to build from
Embark provided critical knowledge and skills to help management meet their many objectives, effectively preparing the company for public entity status after completion of the SPAC reverse merger transaction. Between our expertise on a broad spectrum of needs and the best practices we imparted on process improvement, team structure, and communication, our client now has the accounting & reporting foundation they need for a successful future.
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