When it comes to making an investment decision, relying solely on the target’s audited financial statements may be shortsighted. This is the scenario that the due diligence process was designed for—to provide potential investors with an understanding of a company’s financial earnings, historic sales and expense trends, historic working capital needs, key assumptions used in forecasts, and key personnel and accounting information systems.
While an audit provides assurance that management has presented a true and fair view of a company’s financial performance and position in accordance with well-defined rules and procedures, due diligence can provide an extra level of comfort above and beyond an audit. This not only provides a more complete picture of the company but also provides the information needed for a buyer or investor to make a well-informed investment decision.
To learn more about our Financial Due Diligence services, talk to a Senior Partner today.