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THE FINANCIAL
DUE DILIGENCE SERVICES WE PROVIDE
Enable the buyers to find out all they should reasonably know about what they
buy, these are material facts to help them decide whether to proceed the
transaction or not.
Purchasers who need to be provided with a level of comfort that the financial
statement can accurately reflect all the assets and liabilities of the target
company.
In the buyers' perspective, they should know how to tackle with those risk
factors. These risks cover:
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the political risk associated with the
country in which the target company is based; i.e. to acquire a target
company formed in South
Africa and its
assets may easily be expropriated;
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the accuracy of all the financial
information of the target company - the past audited accounts plus the
latest management accounts, cash flow statement and profit forecast
statement for the future, used to reveal whether any material misstatement
of profit and the net worth of the target company.
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MANAGE A FINANCIAL DUE DILIGENCE
Initial parameters:
These buyers require a preliminary evaluation of the key important areas for the
deciding such acquisition transaction, that evaluation is concerned about the
issues in respect of the key personnel, suppliers and customers of the target
company and other critical factors.
Preparation and execution of the preliminary investigation
It is used to identify deal-breaking issues upfront before money and other
valuable resources are committed to performing detailed investigation. Some
possible issues during the exercise are:
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concealment of material facts and
figures;
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insufficient internal controls
policies;
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non-compliance of or in-adventurous
interpretation of contracts, legal provisions, accounting principles,
policies and standards;
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rapid employee turnover and core
management succession;
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material contingent liabilities;
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statutory non-compliance issues;
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industrial sickness;
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legal proceedings;
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The material misstatement of assets and
liabilities recorded in the management account and the audited financial
statements.
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We provide the financial due diligence services to any potential clients
who are going to participate in any acquisition transaction and please feel
free to contact us.
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