As part of the closing of its year-end accounts, our client, a construction and public works company with offices in France and abroad, asked us to carry out a special review of certain specific sites which were difficult to monitor due to staff movements.
Our customer’s objective was to obtain :
- an assessment of the risk relating to invoicing in progress (invoices yet to be issued), in view of the application of the percentage-of-completion method;
- a trend in billing and cash collection schedules;
- a critical review of estimated end-of-business margins on these sites.
Altermès was chosen for this assignment because of the expertise of its associates in reviewing long-term contracts in France and abroad.
Scope of the site review assignment
For each case selected, we performed the following due diligence:
– Review of contracts and amendments
– Analysis of the context, issues and schedule with the project manager
– Review of budgetary control, committed expenditure and outstanding commitments
– Review of billing and MEF calculations
– Review of trade receivables
– Review of advances received
Site review mission schedule
Our work was carried out at several customer sites, as well as by videoconference. We spoke mainly with the Managing Director, the CFO and the business managers. Altermès mobilized very quickly to meet the customer’s deadlines. The 5-day/man mission was the subject of a report presented 10 days after initiation of the request.
A summary meeting was held at the end of our intervention to present the results of our work. A feedback document was also sent to management.
Result of our intervention
Our intervention highlighted and brought to the attention of management :
- significant adjustments to the financial statements ;
- and risk areas to be monitored in the short and medium term.
The involvement of an independent third-party specialist in the building and civil engineering sector enabled management to prepare its financial statements on the basis of a precise assessment of the risks and stakes involved in its construction sites.
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