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Preparing Group for Financial Due Diligence

Financial due diligence is conducted by independent auditors and directed towards confirming your company’s historical financial results and understanding its future operational and financial prospects. However, many private company’s accounts are not kept in a manner to facilitate such examination. Thus, prior to this occurring, ACH either simply advises or sends in a team to ensure that the company will pass financial due diligence.

 

The key areas that many Asian private companies have problems on are: –

 

  • Pro-forma consolidations based on audited financial statements
  • Accounting (restructuring can result in differences being taken to P&L lowering the profitability of the group) and tax efficient capital structure
  • Where and what product, divisional and/or geographical breakdown to provide
  • If local accounting is not IFRS based to reconcile with IFRS
  • Budgeting and settling up systems for quarterly or half yearly reporting (within 45 days)
  • Appropriate accounting policies
  • Adequate financial control systems, IT and policy compliance
  • Adequate and timely disclosure structure
  • Consolidating, recording, monitoring and management of receivables, debt, debt covenants and contingent liabilities
  • Monitoring and reporting of IPO proceeds

 

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