Mergers, Acquisitions, and Divestitures: Control and Audit Best Practices

With the breadth of the charter of internal auditing reaching into all facets of an organization's activities, it is essential that control mechanisms be in place for the consideration of risk resulting from business combinations. This research will examine current practices employed by internal audit departments in support of mergers, acquisitions, and strategic alliances. The research will target the challenges to the control processes which emerge as different business cultures are blended into one entity. Similarly, this research will examine the participation of internal audit departments in organizing, staffing, reporting, and monitoring the business combination activities. This research should codify the activities of leading-edge companies and evolve consensus regarding elements of effective internal audit practice.

Georges M. Selim, Bcom, Mcom, Ph.D., FIIA (UK), is Professor of Internal Auditing and Director of the Centre for Internal Auditing at Sir John Cass Business School (formerly the City University Business School) - London, UK. He is a former member of the Executive Committee and Board of Directors of The IIA (1993-1996), and a former President of The IIA-UK (1991-92). In 1991, he was appointed Deputy Dean of the Business School (1991-93) and previous to that was appointed Sub-Dean (1988-91). In his capacity as Deputy Dean he led the development of the Management MBA in Europe and the Middle East. Professor Selim has written numerous books and articles and has lectured extensively on internal auditing, accounting, and corporate governance in Europe, the Far East, and U.S. He is the independent chairman of the audit committees of a large UK government agency and of a large UK government department. Professor Selim was elected the "1992 Educator of the Year" by The IIA and was awarded in 2000 — with David McNamee — the John B. Thurston Award for Literary Excellence for their paper titled "The Next Step in Risk Management."

Sudi Sudarsanam, BSc, MSc (Physics), MSc (Finance), Ph.D. (Accounting & Finance), ACIB (Associate of the Institute of Bankers, London), is Professor of Finance & Corporate Control at the Cranfield University School of Management in the UK. He is also Director of the Finance Track on the MBA programme at Cranfield. He was previously Professor of Finance & Accounting at the City University Business School, London. Professor Sudarsanam is the author of The Essence of Mergers and Acquisitions (Prentice Hall, 1995), a leading textbook on this subject. His second book, Creating Value through M & A: The Challenges, is due for publication in 2003, to be published by Prentice Hall. Professor Sudarsanam has published over 20 articles in top refereed journals in the U.S. and Europe on M & A, corporate restructuring, financial analysis, and corporate governance and in professional journals, and presented over 40 international conference papers. He is an Associate Editor of the Journal of Business Finance & Accounting.

Michael K. Lavine, MSc., M.S., B.S., CIA, CISA, CGFM, is a Visiting Assistant Professor of Computer and Information Sciences and Accounting at Towson University in Baltimore, Maryland. He is also Managing Director of Business Solutions International, LLC and provides a variety of consulting and training services to clients in the U.S., Europe, and Africa. Professor Lavine has 12 years of diverse experience as an internal, IT, and external auditor — most recently with PricewaterhouseCoopers, LLP. Currently, he is completing his Ph.D. studies in IT Security at Sir John Cass Business School, City University in London, England. Professor Lavine has published a number of articles in IT auditing, accounting information systems, and fraud in such journals as The CPA Journal, The Review of Business Information Systems and The Review of Accounting Information Systems.