Most of our clients use compiled financial statements, and some go a step further with reviewed statements. That’s acceptable, however, if you have more than $15-$20M in revenue or industry requirements, audited financial statements a year or two before you plan to sell may be a good investment.
With validated financial accuracy, you increase buyer confidence, shorten due diligence, and help get your company sold. I’ve had strategic and private equity buyers tell me they’ve paid 0.25 to 0.5 more on deal multiples for a business with strong financial statements. As your business size grows, those quarter points can make a big difference in the purchase price and definitely outweigh the cost of an audit.