Due diligence service is required in the circumstances where you are going to acquire a business or going to be merged in existing group. This assignment consists of investigative nature which is carried out before signing a business deal.
This is a kind of voluntary investigation in order to estimate the true value of the business which you are going to acquire. This assists in taking timely informed decisions and to understand the true positioning of the business.
Purpose based due diligence
An investigation of current practices of process and policies witha reasonable investigation focusing on material future matters. This examination is being achieved by asking certain key questions, including, how do we buy, how do we structure an acquisition, and how much do we pay?
1. Process Audit
This would include the get close observation of company’s processes and areas of improvement in them in order to drive desired results out of each. This would like a deep diving into end to end process focusing on expected deliverable required on each part
2. Information System Audit
This would contain testing of effectiveness and efficiency of information process, control, compliance with policy, and safeguard of information asset. This also includes to investigate if information systems are in compliance to information security standards.
3. Compliance Audit
This focus on the fulfillment of compliance requirements for number of regulatory authorities. This may include compliance to environment laws, financial directive, or other statutory required which are necessary to perform certain in order to perform certain types of operation in an organization.
4. Marketing Audit
This exercise considers internal and external factors impacting on marketing process and outcome related to it. This helps to gauge the positioning in market, market share and arriving at competitive which could be achieve by following a certain strategy.
5. Reconciliation Audit
This could possess Ledger to sub ledger reconciliation, Bank reconciliation, inventory reconciliation audits, and customer and supplier reconciliation. The detailed examinationcould lead to arrive at major differences which may result in potential risk not only to financial statements but also business operations.