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Small IPOs Pose Bigger Investment Risks, Study Shows

June 29, 2021, 9:00 AM

Small IPOs are more likely to issue going concern warnings, restate financial results, and face steep increases in audit fees, according to a new report from Audit Analytics.

Audit fees for smaller companies typically spike more than 50% in the first year as a listed company and those fees typically double in just five years. Small firms, those that raise less than $75 million, also issue going concern warnings at far higher rates than larger IPOs.

The combination underscores the risks that IPOs face as they transition from a privately held business to a publicly traded ...

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