Due Diligence Audit
Due Diligence Audit
Due diligence audit is an investigation or examination of a business entity before signing a contract or an agreement which requires a certain standard of care. A Top Due Diligence firm investigates the business entity’s financial, legal and other statutory compliances that could be carried out for potential objectives such as investment, merger, acquisition etc by an investor with their Best Due Diligence services in Bahrain. While investing in conducting a business, the management should take special care not to make any mistakes. Even small mistakes can lead to immense problems and invite penalties down the line.
Company Due Diligence?
In the English language, Diligence means careful/persistent work/effort. Company Due Diligence refers to the examination and analysis of the company records, which will help in determining the financial standards of the company. This service is mostly availed from Top Due Diligence firms by businesses when merging or acquiring new businesses.Best Due Diligence services in Bahrain will allow the management to gain the need of the present financial condition of the company and also help in uncovering any problems in the businesses. The management will be able to act on the said information and correct the course of the business.
Objectives of conducting a Company Due Diligence
The primary aim of Company Due Diligence is to check the value of all the assets and liabilities of the business. Due Diligence will also assess business risks that are currently being faced by the business or the potential threats which can occur in the near future.
The objectives of Company Due Diligence are:
- Collect as much information about the target company as possible
- Conduct the SWOT analysis of the company to identify its strengths and weaknesses
- Identify the areas in which improvement is required.
- Help in the decision-making process for the management
Enhancing the confidence of the investors and allowing them to make informed decisions about investing in the company.
There are many other reasons why a company may conduct Due Diligence. These reasons depend on the requirement of the company and also to know whether fulfilling such requirements will create any problems for the management or not
What are the Different Types of Company Due Diligence?
Company Due Diligence can be a lengthy process, and the different types of Due Diligence that management can choose from are:.
Financial Due Diligence
Financial due diligence is a review of historical data, including trade results, cash flow and balance sheet of a company to know its financial position. It also includes a review of forecast performance and funding requirements.
Legal Due Diligence
Legal due diligence includes the investigation of any legal risk associated with the rights and obligations of the target company. The issues may involve intellectual property, employment disputes and property ownership.
The management of a company must take special care to understand the requirements of the company and avail services according to the need and demands of the business.
Commercial Due Diligence
Commercial due diligence is conducted to examine various commercial factors, including market conditions, competitor analysis, product or service assessment, and any other commercial data the user wishes to investigate.
Operational Due Diligence
Operational due diligence considers the review of non-financial matters of a business, which may include insurance and risk assessment, HR activities, review of systems and processes and evaluation of the management team.
Due diligence's primary benefit is that it gives management thorough information about the company. This will aid management in making well-informed choices regarding mergers and acquisitions. By giving them knowledge about the various aspects of the business, due diligence can also be helpful to a company's investors. Investors will be able to make an informed choice after receiving this information and determine how it will affect the company over time. Finding new and crucial information about a company will aid management in making decisions about the future of the company, improve its productivity, and increase its profitability.
- A due diligence report serves as a risk assessment tool for an organisation.
- Due Diligence aids in finding any obscure company information.
- Due Diligence boosts a business's reputation.
We provide the following due diligence services to our clients:
- Recognizing and quantifying deal-specific risks of the entity
- Helping to identify hidden costs, contingencies, and commitments of the company
- Finding the issues which are likely to affect the purchase price or contract conditions
Due Diligence should be initiated by the management before taking any decisions about a company. After having the complete information, the management will be in a better position to take decisions. The complete process of Due Diligence should be done in about 60 days. However, the type of Due Diligence which has to be used by a business depends upon the need of the management and the nature of the business conducted.
GSPU is a financial consultancy firm, offering a wide range of services including accounting, auditing, software consultancy, and management. We have been providing the best audit services in GCC, INDIA and other Asian and Middle East Countries.
At GSPU we assist our clients to perform all types of due diligence to maximize the value of a proposed transaction.