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Do I need audited financials to go public?
Yes. Every route to becoming an SEC reporting company requires financial statements audited by a PCAOB-registered firm. For most small companies that means two years of audited financial statements, or every period since the company began if it is newer. A clean audit is often what sets the timeline. Companies with organized books get through it in weeks; companies that must rebuild their records can take months.
Joel Arberman, Meraki Partners · Updated October 25, 2026. Based on 17 companies taken public since 1999: 11 by direct listing, 4 by reverse merger and 2 by IPO.
How many years of audits does each route require?
| Route | Audited financial statements |
|---|---|
| Direct listing (Form S-1) | Two years for a smaller reporting company or emerging growth company, plus reviewed quarterly statements if the latest year-end is more than about four and a half months old |
| IPO (Form S-1) | Two years for an emerging growth company; underwriters may ask for more |
| Form 10 registration | Two years for a smaller reporting company |
| Reverse merger (Super 8-K) | Two years of the operating company, filed within four business days of closing |
| Regulation A Tier 2 | Two years (or since inception), audited |
| Regulation A Tier 1 | Two years, not required to be audited unless already available |
| OTCQB | Annual statements audited by a PCAOB-registered firm, through SEC reporting |
Who can do the audit?
A firm registered with the Public Company Accounting Oversight Board. Your current CPA can do it only if the firm is PCAOB-registered and hasn't prepared your books. We usually narrow the choice to a few firms or tell clients which one to use. See choosing a PCAOB auditor.
Can a company with no revenue be audited?
Yes. A startup's audit is often simpler because there is less activity. More than a dozen of the 17 companies we have taken public had no revenue when they listed.
How long does the audit take?
It depends on the state of the records. Books that are closed, reconciled and supported by documents can be audited in weeks. Missing records, mixed personal and business accounts, or unclear share issuances can stretch it to months. Start the audit early; in a direct listing it runs alongside the private raise.
What do audits cost?
Costs depend on the auditor and the company's size and complexity. They are part of the third-party costs of going public, which typically run $300,000 to $500,000 for a direct listing and can be paid from the pre-listing raise. See what it costs to go public.
Do I need audits after going public?
Yes. A reporting company files an audited annual report on Form 10-K and has its quarterly reports on Form 10-Q reviewed by the auditor. If the company acquires a significant business, it must also file that business's audited financial statements.
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