The second of two articles on the audit of acquisitions examines “good practice” in the review by internal audit of newly acquired subsidiaries. Control of acquisitions can be difficult to achieve due to resistance from the subsidiary, and diffidence from the parent. These barriers must be overcome to achieve improved corporate performance. The approach recommended is to create a post‐acquisition team in which internal audit should play a leading role. Three critical areas need to be addressed to ensure effective control. Business systems should be reviewed to verify that reliable management information is produced, and costs contained. Remedial restructuring may be needed to shorten communication lines, and create accountable business units. Human resource management should ensure that suitable people are appointed and motivated to run the company. Operational reviews should subsequently ensure that operations are fully integrated, and that original goals have been met.
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