Reporting Accountant
Definition
A reporting accountant is the independent accounting firm a company appoints to report on its financial information and financial procedures during an IPO. The role is distinct from the statutory audit. The auditor gives an opinion on the annual accounts; the reporting accountant carries out a defined set of engagements for the transaction, often with a different team and sometimes from a different firm. Its typical work covers four areas: an accountant's report on the historical financial information, where the offer document requires one; a private long-form report to the sponsor or nominated adviser on the business, its finance function and its controls; a working capital report supporting the directors' working capital statement; and a report on the company's financial position and prospects procedures (FPPP), which considers whether the board has procedures in place to make proper judgements about the company's financial position and prospects. The division of responsibility is simple to state: the company prepares, and the reporting accountant reports. The directors own the numbers, the forecasts and the procedures; the reporting accountant examines them and reports on what it finds. Worked example: a company preparing to join AIM produces a board-approved cash flow forecast and a set of financial reporting procedures. The reporting accountant tests the assumptions behind the forecast for its working capital report, reviews the procedures for its FPPP report, and sets out its view of the finance function in the long-form report to the Nomad, which is assessing whether the company is appropriate for AIM. Contrast: the statutory auditor reports on the annual accounts, whereas the long-form report is a private document addressed to the sponsor or Nomad rather than to shareholders.
Complementary Terms
Concepts that frequently appear alongside Reporting Accountant in practice.
Historical financial information is the past-period financial record a company includes in a prospectus or an AIM admission document when it seeks admission to a public market. It normally covers the last three financial years, or the period since incorporation if that is shorter, and it is either audited or reported on, so that investors can rely on the track record behind the offer.
The comprehensive investigation and analysis of a business prior to an investment, acquisition, or partnership. Due diligence covers financials, legal, commercial, technical, and operational areas, and increasingly includes assessment of intangible assets and productivity metrics.
A nominated adviser, usually shortened to Nomad, is the corporate finance adviser that every company on AIM, the London Stock Exchange's market for growing companies, must retain at all times. A Nomad must itself be approved by the London Stock Exchange to act in the role, and AIM's regulatory model relies on it to act as a gatekeeper for the companies it advises.
The difference between current assets and current liabilities, representing the short-term liquidity available to fund day-to-day operations. Effective working capital management ensures a business can meet its obligations while optimising cash flow for growth investment.
A chronological record of system activities, transactions, or document changes that provides a verifiable history of who did what, when, and why. Audit trails are essential for regulatory compliance, fraud detection, and internal controls, and are required by standards including SOX, GDPR, and ISO 27001.
The process of offering shares of a private company to the public for the first time through a stock exchange listing. An IPO is a major exit route for venture capital and private equity investors, and requires extensive preparation including financial audits, regulatory compliance, and valuation.
An admission document is the disclosure document a company publishes when it joins AIM and no prospectus is required. It is the main record on which investors assess the company at admission, and its contents follow the AIM Rules.
The policies, procedures, and controls organisations implement to ensure they do not engage in prohibited transactions with sanctioned countries, entities, or individuals. Sanctions regimes are administered by bodies including OFAC (US), OFSI (UK), and the EU Council, and violations can result in severe criminal penalties, asset freezes, and reputational damage.
Further Reading
What a company prepares before the reporting accountant starts work, and how the workstreams fit together.
Read more →Related FAQ
How do you protect intangible asset value during an M&A process?
Protect intangible value by obtaining pre-sale valuations, documenting IP ownership, retaining key employees through incentives, maintaining customer relationships, and structuring earnouts to bridge valuation gaps.
Read full answer →What should founders know about due diligence timelines and costs?
Due diligence takes 8-16 weeks and costs £50K-£200K: legal (£30-80K), accounting/audit (£20-60K), technical assessment (£10-40K), other professional services.
Read full answer →How do you present intangible assets to investors?
Present intangible assets as evidence of sustainable competitive advantage, backed by financial metrics (LTV, pricing power, churn reduction) rather than anecdote.
Read full answer →Put this knowledge to work
Use Opagio's free tools to measure and grow the intangible assets that drive your business value.