When a company is considering expanding into international markets, growth through mergers or acquisitions is an obvious consideration. Acquiring a pre-existing foreign company provides a ready-made starting point for operations with an established history in the market, but also comes with risks to a U.S. company that cannot be overlooked. While there are many business and legal considerations in making such an acquisition, there are two core areas of technology oversight risks that should always be top of mind: accounting systems and IT infrastructure.

Visibility Into Company Accounting Systems

Many large U.S. companies are accustomed to having a comprehensive accounting application that provides for effective oversight and auditing from a centralized location. A variety of tools can be used for this sort of oversight, but generally they will allow for review of detailed accounting information supporting general ledger entries in addition to more comprehensive “rolled-up” data. Some will also link to items like receipts or purchase orders related to transactions. In certain parts of the world where U.S. companies might seek to expand, accounting systems may be less advanced and provide a significantly lower level of accessibility. Due to variations from country to country in local accounting requirements, concern with GAAP and other U.S. standards may be completely unfamiliar to a target company. Smaller entities may have an almost completely paper-based accounting system, or they may rely on basic tools like spreadsheets maintained by a company employee rather than the kind of multipurpose application that might be used in the United States.