03-16-2007, 07:48 PM
Dear,
So far no standards and guidelines have been developed by any of the Institute in the world for general studies or guidance on Due Diligence. However, certain wroldwide consulting firms have developed their own checklists and plans for various sort of due diligences. You can search sources of such checklists from Internet and buy them through online payments. These are available from 100 USD to 300 USD.
I have written a 15 pages article on Due Diligence that has not so far been sent by me for publishing to "Pakistan Accountant" of ICAP due to certain professional reasons. Infact, it is a professional art of higher quality which professionals do not shares with others being the business secret.
A Due Diligence study is a vigilant and systematic investigation of a subject business. It is done prior to entering into the final deal of whatever nature.
The most common reason for due diligence studies are corporate acquisitions and mergers whereby the due diligence techniques are used to investigate the company being acquired or merged. These are also supposed to be the most meticulous types of studies. The buyer or merger partner wants to make sure that it has an in-depth view of all the issues peculiar to its decision for finally executing the buyout or merger plan.
The most crucial aspect of due diligence is to find out what can affect the price being paid and what is the maximum consideration that should be offered. Even the preparation of financial projections and models based upon significantly accurate assumptions cannot necessarily lead to the precise results unless a complete due diligence is carried out for the conclusive evidences in support of the projections.
For example very attractive financial results cannot replace the importance of the accurate titles to the underlying assets of the business that could be ensured through due diligence investigation. There are widespread off balance sheet matters which could not simply be concluded and understood without having detailed studies.
You must develope your own checklists, in my view, as it would then be your own secret that how you conduct due diligence and take-up to investigate the hidden skeletons and how you incorporate or suggest to incorporate the results of your due diligence in the financial models leading to determination of price to be paid.
Best regards,
Kamran
So far no standards and guidelines have been developed by any of the Institute in the world for general studies or guidance on Due Diligence. However, certain wroldwide consulting firms have developed their own checklists and plans for various sort of due diligences. You can search sources of such checklists from Internet and buy them through online payments. These are available from 100 USD to 300 USD.
I have written a 15 pages article on Due Diligence that has not so far been sent by me for publishing to "Pakistan Accountant" of ICAP due to certain professional reasons. Infact, it is a professional art of higher quality which professionals do not shares with others being the business secret.
A Due Diligence study is a vigilant and systematic investigation of a subject business. It is done prior to entering into the final deal of whatever nature.
The most common reason for due diligence studies are corporate acquisitions and mergers whereby the due diligence techniques are used to investigate the company being acquired or merged. These are also supposed to be the most meticulous types of studies. The buyer or merger partner wants to make sure that it has an in-depth view of all the issues peculiar to its decision for finally executing the buyout or merger plan.
The most crucial aspect of due diligence is to find out what can affect the price being paid and what is the maximum consideration that should be offered. Even the preparation of financial projections and models based upon significantly accurate assumptions cannot necessarily lead to the precise results unless a complete due diligence is carried out for the conclusive evidences in support of the projections.
For example very attractive financial results cannot replace the importance of the accurate titles to the underlying assets of the business that could be ensured through due diligence investigation. There are widespread off balance sheet matters which could not simply be concluded and understood without having detailed studies.
You must develope your own checklists, in my view, as it would then be your own secret that how you conduct due diligence and take-up to investigate the hidden skeletons and how you incorporate or suggest to incorporate the results of your due diligence in the financial models leading to determination of price to be paid.
Best regards,
Kamran
