Internal Controls – Not Just for Large Public Companies

When cases of fraud or bankruptcy are reported in the news, it is often a multi-billion dollar company that is involved, which generates significant media attention – FTX being a recent example. But what if this happens with a shell company such as a Special Purpose Acquisition Company (SPAC) or a private company? It likely won’t make the front pages. The SEC recently filed and settled charges against a public SPAC for internal controls, reporting, and recordkeeping violations. These reported violations allowed the former chief financial officer of the SPAC to misappropriate approximately $1.2 million from the company’s operating bank account.

Things to Consider

Internal controls are not just important and required for large public companies. Having formalized processes and controls in place is paramount to running an effective and efficient company. Good governance starts with experienced management and experts supporting the different business functions, tone at the top, formal policies and procedures, risk management, and board oversight. Critical internal controls can include areas as simple as ensuring proper segregation of duties and board-level oversight of management, as well as controls over the initiation, approval, recording, and reporting of business transactions, including related party transactions. For SPACs or other companies with limited personnel or operating activities, addressing critical risk areas can go a long way in maintaining effective controls.

As such, it is imperative that you choose financial reporting and risk advisory experts who understand financial reporting and internal controls requirements.

How Centri Can Help

Our dedicated, skilled professionals collaborate with SPAC companies and sponsor entities, target operating companies, auditors, underwriters, and legal counsel in understanding accounting and reporting needs for SPAC filings, related business combinations, and subsequent SEC reporting and internal controls considerations and planning. This allows us to find solutions for your unique accounting needs. If you have questions or need assistance in establishing an internal control or risk management framework, please contact Centri to learn how we can help.

Contact one of Centri’s SPAC or Risk Advisory experts for additional information.


Derek Kearns

Partner | SPAC Practice Leader | CPA

Derek is a Partner at Centri Business Consulting and the leader of the firm’s SPAC Practice. He has more than 23 years of accounting experience in both public and private industries. He joined Centri in September 2020 and...

About Centri Business Consulting, LLC

Centri Business Consulting provides the highest quality advisory consulting services to its clients by being reliable and responsive to their needs. Centri provides companies with the expertise they need to meet their reporting demands. Centri specializes in financial reportinginternal controlstechnical accounting researchvaluationmergers & acquisitions, and tax, CFO and HR advisory services for companies of various sizes and industries. From complex technical accounting transactions to monthly financial reporting, our professionals can offer any organization the specialized expertise and multilayered skillsets to ensure the project is completed timely and accurately.

Eight Penn Center
1628 JFK Boulevard
Suite 500
Philadelphia, PA 19103
New York City
530 Seventh Avenue
Suite 2201
New York, NY 10018
4509 Creedmoor Rd
Suite 206
Raleigh, NC 27612
615 Channelside Drive
Suite 207
Tampa, FL 33602
50 Milk Street
16th Floor
Boston, MA 02109
Tysons Corner
1775 Tysons Blvd
Suite 4131
McLean, VA 22102
8310 South Valley Highway
3rd Floor
Englewood, CO 80112
Centri Everywhere


The Importance of FP&A and How Centri Can Help

Introduction Financial Planning and Analysis (FP&A) is a crucial aspect of any...

Read More


Bridging the GAAP: November 2023

Centri’s Bridging the GAAP newsletter focuses on news, developments, & emerging issues...

Read More


Valuing Contingent Value Rights in M&A Transactions

Contingent value rights (“CVRs”) remain popular instruments in M&A transactions to help...

Read More