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, CPA

Managing Director | SPAC Practice Leader

Derek is the Managing Director and SPAC Practice Leader at Centri. He has more than 20 years of experience with international public filers across various industries, including  technologymedia and telecommunications, mining,  cannabis and manufacturing. Derek’s focus has been on Securities and Exchange Commission (“SEC”) filings, including IPO registration statements, accounting for complex debt and equity transactions, business combination accounting, and international consolidations.

Jeff Cehlar, CPA, CRISC, CCSA

Managing Director | SOX and Internal Audit Practice Leader

Jeff is the Managing Director and SOX and Internal Audit Practice Leader at Centri. He has more than 20 years of accounting, financial analysis, internal audit, and Sarbanes-Oxley experience. He has helped publicly traded and private companies achieve their goals by assisting them with critical projects, including internal audit, SOX compliance, risk management, delegation of authority redesign, internal controls rationalization, financial analysis, closing the books, and due diligence.

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 researchvaluation, and 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.

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