Due Diligence Audit examines the functioning of a commercial venture. The audit ascertains the present financial and operational health of the business before signing any contract. Due diligence exercises get specifically carried out with an objective of investment, a merger and acquisition deal, or some corporate transaction.
Buyers or investors usually conduct due diligence, though, in many cases, even sellers call for a due diligence audit to satisfy their potential clients. The audit investigates the current policies, practices, financial health, market positioning, or any other material information such as contingent liabilities that may matter in the future.
During a due diligence audit, the two parties, who are buyers and sellers in a merger or acquisition deal, ensure that all information exchanged, including financial reports, are accurate and verified. This exercise helps the buyer get the actual value of its company and the seller not to pay excess than its intrinsic value.
Due diligence auditing services in the UAE offered by Absher business Consultancy include different due diligence audits to assist business clients in various ways. Some of our services are given below:
Operational due diligence
It is to review the systems, processes, HR activities, Management team, and risk management procedures.
The financial due diligence involves validating financial reports given by the seller to the buyer. The objective is to ensure that the information gets accurately provided. Thus the associated risk is assessed and its impact in the long term. The financial audit helps to do a SWOT analysis. It consists of operating efficiency, earnings quality, the strength of the Balance sheet, and present and future cash flows.
It helps to find out if there are any legal risks associated with the target company, such as employment, intellectual property, or real estate property disputes.
This exercise involves evaluating the environmental compliance and any gaps in the management system in implementing them.
The audit helps to understand the present position of the company in the market and the internal and external influence that can affect its marketing plan and review of the plan itself.
The audit helps to verify its marketing production records, process, outputs, and the production details and tally with them in the financial statement.
This audit helps to examine the IT infrastructure of the organization. The audit scope includes checking the management control on the IT systems. It looks at the safety of assets and data from the cyber security point of view, and whether it's aligned with the business goals.
It is particularly beneficial to the buyer or investor. It helps them to understand the target business. The audit exercise helps to extract the material disclosures and non-disclosures that could impact the company in the future. The financial position of a company is verified. The quality of the management team is assessed based on the process and policies being followed or not. It will allow the buyer to decide to go ahead with the deal and at the right price.