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Due Diligence Review

Due Diligence Review

The main purpose of due diligence review is to reach comprehensive understanding of company’s real financial position and all risks that may negatively impact it.

Due diligence review implies close cooperation of auditors, tax advisors, lawyers, analysts and appraisers and our competitive advantage is in the ability to engage simultaneously all the required specialists.

Depending on client’s needs scope of Due Diligence Review can vary from express analysis (while information access is limited) to full valuation of position and results of company.

According to client’s needs we can conduct Due Diligence Review within the scope of particular contains. Depending on amount of information conveyed to ACG Interexpertiza specialists we can provide full or cut Due Diligence Review.

The range of services related to due diligence review includes the following:
  • Operational due diligence review;
  • Financial due diligence review;
  • Tax due diligence review;
  • Legal due diligence review;
  • IFRS due diligence review;
  • Valuation for due diligence review.

Due Diligence Necessity

The necessity of due diligence review appears in the following cases:
  • Selling of your business;
  • Business combinations;
  • Opening a foreign branch;
  • Merger;
  • Introducing of proof of solvency to partner or investor;
  • Examination of solvency and reliability of counterparty;
  • Control over subsidiaries’.

Operational Due Diligence

Within the operational due diligence review we analyze business’s history, including origins of its development. We rate risks of its macro- and microenvironment and estimate efficiency of production and providing services methods as well as of business system in a whole. Due diligence report contains information about company’s strengths and weaknesses, including constraining factors, HR policy and also the estimate of company’s prospective.

Financial Due Diligence

In the process of financial due diligence review we analyze the structure of company’s assets and liabilities, incomes and expenses by each type and with a breakdown into each company’s activity. We analyze financial ratios, consider the basis of assets and liabilities valuation and recognition and study the influence of particular elements of the accounting policy. We identify and comment on the factors which significantly affect financial results and nature of cash flows for the period under examination. As a result, we provide expert commentary on top-management forecasts of commercial activity perspectives, cash flows, paying particular attention to their correlation with the current sales. In addition, we analyze the related parties’ influence on financial results and company’s property status.

Tax Due Diligence

Tax due diligence review is carried out for confirmation of compliance of company’s tax reporting with legislation, identification of tax payments completeness and timeliness and also for tax risks estimation. As a result of tax analysis we prepare a report containing conclusions on possible amounts of losses arising from incorrect tax calculation or untimely tax payments and other tax risks. This report also includes conclusion on the company’s tax burden degree. On client’s demand we will also estimate the possibility of tax burden reduction and provide required recommendations.

Legal Due Diligence

In the course of legal due diligence review we provide complex legal examination of the company and its activities. We determine the compliance of company’s activity with civil, labor and currency legislation. Legal due diligence review is carried out to assess the legal risks. Within legal due diligence review we also provide recommendations on company’s key documentation changes for their conformance to current legislation requirements or make a conclusion about impossibility of deficiencies correction with an estimate of possible consequences.

For your questions on due diligence review conducting please contact Julia Koroleva, Director of the Department of Methodology and Audit Quality Control.
 
 

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