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Due Diligence
THE FINANCIAL DUE DILIGENCE SERVICES WE PROVIDE:
Enable the buyers to find out all they reasonably can know about what they buy, that is material facts to help them decide whether to proceed.
Purchasers need to be provided with a level of comfort that material information accurately reflects the assets and liabilities of the target.
It from the buyer's side is about the risk management. Those risks cover:
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political risk associated with the countries in which the target company is based; ie. Companies formed in South Africa.
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Accuracy of the past financial accounts of the target company - plus the latest management accounts and audited accounts, cash flow statement and profit forecast statement for the future, if revealed a material misstatement of profit figures;
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MANAGE A DUE DILIGENCE
Initial parameters:
The company's management requires a preliminary evaluation of the areas of key importance for the success of the transactions. Which continues with the target, key personnel, suppliers and customers.
Preparation and execution of preliminary investigation
It is used to identify deal-breaking issues upfront before money and other valuable resources are committed to a detailed investigation. Some possible issues during the exercise are:
| - | concealment of facts and figures; |
| - | insufficient internal controls; |
| - | non-compliance of or in-adventurous interpretation of contracts, legal provisions, accounting principles, policies and standards; |
| - | employee retention and core management succession; |
| - | contingent liabilities; |
| - | statutory non-compliance; |
| - | industrial sickness; |
| - | legal proceedings; |
| - | The material misstatement of assets and liabilities recorded in the management account, or even thought the audited accounts; |
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