Due & Diligence Audits
In business, a due diligence audit is basically a careful investigation into the complete financial picture of a company. Generally, these audits come before a purchase, merger or other major decision that could influence the finances of one or more businesses. These audits are generally used to ensure that no hidden liabilities exist.
The due diligence procedure involves:
Effective Planning Due Diligence
- Understand what benefits are expected to arise from the Due Diligence process.
- Understand the proposed transaction and the degree of access expected.
- Identify client concerns and implement strategy to counter these.
- Determine the overall timelines for the process and delivery of the Due Diligence report.
Financial Due Diligence
It involves an investigative analysis of a business, assessing the key issues facing the business and the drivers behind maintainable profits and cash flows, identifying the key financial risks and potential deal breakers of the transaction
Tax Due Diligence
Tax due diligence is a comprehensive examination of the different types of taxes that may be imposed upon a particular business, as well as the various taxing jurisdictions in which it may have sufficient connection to be subject to such taxes.
Legal Due Diligence
A legal due diligence review looks at all the legal documents a company possesses. It is important to see how these legal documents are structured and the obligations that exist for a seller. A legal due diligence review will produce the first input for the legal documents that will be used later on in an M&A transaction, the letter of intent and the SPA (share purchase agreement).