US IPO Activity rises 16% as Brolma warns Companies not to leave Accounting Readiness until the Transaction

The recovery in the US initial public offering market is putting renewed focus on an issue that can be underestimated by companies preparing for public-market transactions: whether the finance function is actually ready to operate as a public company. According to data published by the US Securities and Exchange Commission, there were 208 IPOs in the first six months of 2026, compared with 180 during the same period in 2025, an increase of approximately 16%.

The recovery accelerated during the second quarter, with 109 IPOs completed following 99 in the first quarter. PwC has described the current market as entering its strongest stretch in years, with IPO activity broadening across sectors. Brolma Advisory says the improving market is likely to encourage more private companies to revisit IPO plans, capital-market transactions and other strategic options that may have been delayed during weaker market conditions. But while transaction timetables can move quickly, accounting infrastructure often cannot. “An IPO may ultimately be a capital-markets event, but many of the problems that create difficulties during readiness begin much earlier in the accounting function,” said Mary Lee of Brolma Advisory. “A company can appoint bankers, lawyers and other transaction advisers relatively quickly. Building a finance function capable of producing reliable, timely and technically compliant public-company reporting is a very different exercise.”

The gap between private-company and public-company accounting
Many growing businesses operate successfully for years with finance processes designed primarily around management reporting, tax compliance and annual audit requirements. Those processes can become strained when a company begins preparing for a public transaction. Brolma Advisory says common areas requiring attention include things like US GAAP technical accounting and documented accounting policies such as, for example, Revenue recognition, Lease accounting and also Finance team structure, systems and reporting responsibilities. The problem is not necessarily that a company’s accounting is incorrect. Instead, processes that may have been adequate for a smaller private organization can become increasingly difficult to operate as reporting deadlines shorten, transactions become more complex and external scrutiny increases.
“Companies often think of IPO readiness as something that starts once the transaction starts,” Lee said. “In reality, if significant accounting policies still need to be documented, the close is heavily dependent on manual processes, technical accounting issues have accumulated or the finance team relies extensively on the external auditor, those issues are much easier to address before the transaction timetable becomes critical.”

Auditor independence can add another complication
Growing businesses may also rely heavily on their external auditors for technical accounting guidance, financial statement preparation and other accounting support. That can become more difficult as a company moves toward public-company reporting requirements and auditor independence considerations become increasingly important. Brolma Advisory says businesses considering a transaction should therefore assess not only whether the numbers are accurate, but also whether the company itself has sufficient accounting capability, documentation and controls to support them. “The objective should not simply be to get through an IPO,” Lee said. “The finance function has to be capable of operating after the IPO as well. Quarterly reporting deadlines, technical accounting conclusions, controls, audit requirements and SEC reporting do not disappear once the transaction closes.”

Earlier preparation gives companies more options
Brolma Advisory recommends that companies contemplating an IPO, SPAC transaction or other public-market event undertake an accounting readiness assessment well ahead of the proposed transaction. This can identify technical accounting issues, reporting gaps, control weaknesses and resource constraints while management still has time to address them without the pressure of a live transaction. With US IPO activity continuing to recover in 2026, Brolma expects accounting and reporting readiness to become an increasingly important issue for growth companies evaluating their next stage. “Market conditions can change very quickly,” Lee said. “Companies that have already strengthened their accounting, reporting and controls are in a much better position to act when an opportunity appears.”

About Brolma Advisory
Brolma Advisory provides accounting, tax, reporting and CFO advisory services to businesses operating in the United States and internationally.
The firm’s Accounting & Reporting practice supports businesses across financial reporting, US GAAP and IFRS, technical accounting, consolidations, internal controls and SOX, SEC and public-company reporting, audit support, transaction readiness and finance process improvement. For more information, visit Brolma.com.