How can you successfully invest in an audit firm when regulations prevent an investor from holding the majority of voting rights in its governing bodies, while management must remain in the hands of statutory auditors?
In our latest article published in Dziennik Gazeta Prawna, we examine how investors can reconcile their commercial objectives with the requirements of the Polish Act on Statutory Auditors and the regulatory practice of the Polish Audit Oversight Agency (PANA), as well as the governance mechanisms available to protect their interests.
Among other topics, we discuss:
- transaction structuring models for audit firms, including the separation of economic rights (for the investor) from control rights (for statutory auditors) and split-company structures,
- the role of the shareholders’ agreement as the key instrument for safeguarding the investor’s position, covering governance, reserved matters, reporting and remuneration,
- the importance of engaging with PANA before closing the transaction to ensure compliance with independence requirements and maintain audit quality,
- protecting human capital through incentive schemes, reinvestment mechanisms and non-compete arrangements for key personnel.
Our article demonstrates that investing in an audit firm is entirely feasible, but it requires a far more sophisticated structure than a standard M&A transaction.
The article was authored by Mirosław Fiałek, Partner, and Jakub Wilk, Associate.