Embark + Occupier Case Study
LARGE CASUAL DINING CHAIN CASE STUDY
Embark delivered skills and support to help the client become PCAOB audit-ready
Overview
As the client, a popular casual dining chain, prepared for a future as a public entity, management realized the company lacked both the complex transaction analysis 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 financial reporting team continuity and skill.
The big wins
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Successfully converted the company from QuickBooks to a more comprehensive ERP to better support its rapid growth
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Reviewed several material acquisitions going back years, addressing all complex transaction analysis issues along the way
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Client challenges
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 reporting for recent acquisitions. Between auditing and reporting demands, a shortage of talent, and other key financial reporting concerns, leadership developed a series of objectives to help the company address these often overwhelming challenges:
- Team continuity in key areas, particularly complex transaction analysis
- 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 financial reporting procedures for a compressed timeline
- Evaluate revenue recognition procedures & documentation according to ASC 606 guidance
- Finalize requirements for its PCAOB audit
The solutions
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 financial reporting function:
Public company reporting & transactions
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Updated its financial statements, including all required disclosures for public companies
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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
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Addressed and resolved all questions and needs from auditors regarding past transactions
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Completed several ad hoc projects as they arose, including SEC & US GAAP financial reporting checklists, technical memos, reporting guidance for stock compensation transactions, pro forma financial information, and long-lived asset impairment testing
Financial reporting support & process improvement
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Verified and documented the reasonableness of the inputs used in its valuation reports, while also guiding its team on the correct reporting for their acquisitions, and documented technical memos for management and their auditors
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Provided team continuity so its in-house team could focus on the financial close, reporting, audit requests, and other standard processes
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Reviewed previous conclusions by the company on applying ASC 606 to ensure accuracy before providing revenue recognition memos to the auditors
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Functioned as a conduit between management, auditors, tax & valuation specialists, legal counsel, and other outside parties
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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 support and experience on a broad spectrum of needs and the best practices we imparted on process improvement, team structure, and communication, our client now has the financial & reporting foundation they need for a successful future.
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