Due Diligence Review & Audit
Assurance over information in Financial Statements help to navigate complexity & brings transparent information to investors & stakeholders.
Review
Risk
Diligence
Due diligence is an investigation, audit, or review performed to confirm the facts of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party. The theory behind due diligence holds that performing this type of investigation contributes significantly to informed decision making by enhancing the amount and quality of information available to decision makers and by ensuring that this information is systematically used to deliberate in a reflexive manner on the decision at hand and all its
costs, benefits, and risks.
Areas of due diligence process (framework)
There are several types of DDR, which are as listed below:
1. Business/Market Due Diligence.
2. Technical Due Diligence.
3. Human Resource Due Diligence.
4. Legal Due Diligence.
5. Environment Due Diligence.
6. System Due Diligence.
7. Tax Due Diligence.
8. Financial & Accounting Due Diligence.
Methodology of DDR will depend upon the needs of the client, nature of review and time available. Hence, in any DDR, we follow the steps listed below:
- Understand the needs of the client and decide the scope and objective accordingly;
- Preparation of list of information to be obtained from the client, which is necessary for carrying out DDR;
- Periodically hold review meetings with the team to ascertain the status of the DDR and further actions to be taken.
The auditors carrying out DDR is exposed to inherent risk and has to face financial indemnification of the consequential loss if any. To mitigate the risk involved, the following should be ensured:
- Proper understanding of the objective of the assignment before accepting the assignment and deciding the scope.
- Review of other DDR reports, collect the copy of the same from the client and hold meetings with the other reviewers.
- Disclose the scope and limitations of the assignment in the DDR Report.
Lex Koterie LLP, provide our clients with proper guidance to mitigate the risk involved and ensuring risk management in an efficient and best possible manner. If you are looking for corporate due diligence services, then our competent professionals guide our client’s on due diligence to optimize its objectives.
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