38.3% were “rejected” by their desired audit firm
*Oro Co., Ltd.*
Press release: August 30, 2024
**
38.3% were “rejected” by their desired audit firm
*Survey on the actual situation regarding “audit refugees” and “securities refugees” issue 2024*
Oro Co., Ltd. (Head office: Meguro-ku, Tokyo, Representative Director, President and Executive Officer: Atsushi Kawada)
We hereby report that we have conducted a fact-finding survey regarding the “audit refugee” and “securities refugee” issues among 355 managers and executives from N-3 to N-terms who are aiming to be listed on the stock market. . This survey has been conducted every two years since July 2022, and the previous survey (“Audit Refugee Issue 2022”)
https://prtimes.jp/main/html/rd/p/000000104.000075257.html “Securities Refugee Issue 2022”
We also conduct a comparative analysis with
https://prtimes.jp/main/html/rd/p/000000107.000075257.html).
-Survey on the actual status of “audit refugees” and “securities refugees” issue 2024-
■Survey summary
– *The number of companies considered by auditing firms was 1 company, 42.0%, and 2 to 3 companies, 41.4%*
– *23.9% for “Securing an audit firm” for “4 to 6 months”* – * 36.6% said they were “troubled” in “securing an audit firm.” Improvement trend compared to the previous survey*
– *38.3% were “rejected” by their desired audit firm*
– * 31.8% said they were “troubled” by “securing a lead
underwriter.” Improvement trend compared to the previous survey* – *31.3% were “rejected” by the lead underwriter of their choice* – * More serious is the “audit refugee” than the “securities refugee” * – *The number one issue during the IPO preparation period is “legal affairs and compliance” 27.0%*
Survey overview: Survey on the actual situation regarding “audit refugees” and “securities refugees” issues
Target area: Nationwide
Target audience: 355 managers and executives from N-3 to N-term who are aiming for stock listing
Survey method: Internet questionnaire survey
Survey period: June 6, 2024 to June 28, 2024
Research company: Neo Marketing Co., Ltd.
*The composition ratio is rounded to the second decimal place, so the total may not add up to 100.
*If you wish to reprint or use the contents of this survey, please include credit.
“Example: According to a survey conducted by Oro Co., Ltd., which provides cloud ERP “ZAC”…”
*Survey results*
■The number of companies considered by auditing firms is 1 company, 42.0%, and 2 to 3 companies, 41.4%.
When asked about the number of audit firms they would consider, 42.0% said “1” (30.6% in the previous survey) and 41.4% said “2-3” (46.8% in the previous survey). (Figure 1)
Compared to the previous survey, the number of companies under consideration has increased by one.
■23.9% for “Securing an audit firm” for “4 to 6 months”
When asked how long it took (or is it taking) to secure an audit firm, the most common response was “4 to 6 months”, 23.9% (19.8% in the previous survey). This was followed by “2 to 3 months” at 20.3% (previous survey: 24.0%) and “7 to 12 months” at 18.0% (previous survey: 15.2%). (Figure 2)
■36.6% said they had trouble securing an audit firm. Improvement trend compared to the previous survey
When asked whether they had trouble securing an audit firm, a total of 36.6% answered “I have a problem (I have a problem)” or “I have a little trouble (somewhat a problem).” (Figure 3)
In the previous survey, a total of 43.2% said they were “troubled,” so this seems to be an improvement trend.
■38.3% were “rejected” by their desired audit firm
When asked if they had ever been turned down by their desired auditing firm. “Yes” 38.3%;
“No” 61.7%
That was the answer. (Figure 4)
Compared to the previous survey, although there has been an
improvement in securing audit firms, it can be said that the problem of “audit refugees” still persists, with around 40% of cases being rejected by the audit firm of their choice. .
■The number of lead underwriter securities companies considering was 1 company, the highest at 43.9%.
When asked about the number of lead underwriter securities companies they were considering, 43.9% (43.9% in the previous survey) answered “one company”, followed by “2-3 companies” at 37.2% (43.0% in the previous survey). It has become. (Figure 5)
Compared to the previous survey, the number of companies under consideration has increased by one.
■“4 to 6 months” for “Securing a lead underwriter” 23.1%
When asked how long it took (or is it taking) to secure a lead underwriter, the most common response was “4 to 6 months” at 23.1% (21.6% in the previous survey). This was followed by “2 to 3 months” at 19.7% (21.8% in the previous survey). (Figure 6)
There were no major changes in the length of time taken from the previous survey.
■31.8% were “troubled” in “securing a lead underwriter”. Improvement trend compared to the previous survey
When asked if they had any difficulty securing a lead underwriter, a total of 31.8% answered “I have a problem (I have a problem)” or “I have a slight problem (somewhat a problem).” A total of 33.5% of respondents answered “I’m not really bothered” and “I’m not bothered (not bothered).” (Figure 7)
In the previous survey, a total of 37.0% said they were in trouble, and 32.0% said they were not in trouble, so it can be said that the securities refugee issue is also improving.
■31.3% were “rejected” by their desired lead underwriter
When asked if they had ever been rejected by their desired lead underwriter securities company.
“Yes” 31.3%
“No” 68.7%
That was the result. (Figure 8)
■The more serious problem is “audit refugees” than “securities refugees” Comparing the percentage of rejections by “auditing firm” and “lead securities company”
Percentage of applications rejected by the desired “auditing firm”: 38.3% Percentage of requests rejected by the desired “lead underwriter”: 31.3%
This is the result. (Figure 9)
Both the “securities refugee” and “audit refugee” issues seem to be improving compared to the previous survey, but consider the current situation where 30% to 40% of companies are rejected by their desired securities company/lead securities company. It seems that both refugee issues have not yet been improved. The problem of “audit refugees” is particularly serious, as approximately 40% of companies are rejected by their desired audit firm.
■The number one issue during the IPO preparation period is “legal and compliance issues” 27.0%
When asked about the particular challenges/issues in preparing for the IPO
“Response to legal affairs and compliance” 27.0%
“Earlier monthly settlement” 24.5%
“Establishing an approval/checking system to ensure internal controls” 23.9% “Response to internal controls (J-SOX)” 22.8%
“Response to IT and system controls” 22.8%
This is the result. (Figure 10)
■ 58.0% said it is necessary to introduce an ERP/integrated core system for IPO When asked if they had introduced an “ERP/integrated core system” or changed (replaced) the software they were previously using,
“I have installed/I am installing/I am replacing/I am replacing” 23.9% “I have not introduced it, but I think it is necessary” 58.0% “I don’t think it will be necessary to introduce it in the future” 18.0%
This is the result. (Figure 11)
■Introducing or replacing “ERP/integrated core system” was “effective” for IPO preparations for a total of 72.9%
Those who answered that they had (are) introducing an “ERP/integrated core system” or changing (replacing) the software they were previously using were asked whether they had installed an “ERP/integrated core system” or When asked whether Replace was effective in preparing for an IPO,
“I agree” “I somewhat agree” total 72.9%;
“I don’t really think so” “I don’t think so” total 5.9%
This is the result. (Figure 12)
[General comments from Atsushi Yoshii, Head of Marketing Group, Cloud Solutions Division, Oro Co., Ltd.]
Although there has been an improvement in the percentage of companies that feel “troubled” about securing an audit firm for companies preparing for an IPO compared to the 2022 survey results, 36.6% of companies still answered that they were “troubled.” This result exceeds the 29.3% who said they did not have any problems.
One of the factors to ensure that you do not have trouble securing an audit firm and to secure the audit firm of your choice is to establish an internal control system from an early stage and reduce the number of audit-related considerations during the preparation period. By introducing an ERP/integrated core system, you can reduce double entry of business data, ensure data integrity, and improve control by maintaining logs of applications and approvals.
In this survey, 72.9% of companies answered that introducing ERP/integrated core systems is effective for IPO preparation, and ERP implementation is one of the useful measures to avoid becoming an audit refugee. I think I can say that.
■Contact information regarding cloud ERP “ZAC”
Oro Co., Ltd. Marketing Group
TEL: 03-5843-0653 / Mail: zac@jp.oro.com
■Contact information for press inquiries
Oro Co., Ltd. Public Relations
TEL: 03-5843-0836 (direct) / Mail: info@jp.oro.com
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