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need help related to due delligene

Amit Aggarwal (Chartered Accountant) (40 Points)

12 January 2008

hi...........

i got the audit related to due delligence.....

can anyone help related to due delligence.....

plz what i have to check......

how to behave with client in this audit....

plz tellllllllllllllllllllllllllllll..............................

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3 Replies

shilpa (company secretary in practice) (148 Points)
Replied 12 January 2008

hey its a huge task, but depends upon the Company volume. You have to go to the rought of each and every transaction.You have to bifurgate that activity in 3 broad areas financial , Legal , HRM. In financial you have to identify the source of finance , then application of funds and the future prespective of that company in next say 2-3 yrs. Legal: you have to check the compliance made by the company in all the acts which are applicable to that company.e.g.say company law: check all the documents from incorporation till the date. find out the applicable laws and check for their compliances Next thing any cases pending in the court of law or it may be closed in favour or may be against, but you have to comment on that then directors, shareholders and their details. While doing audit for HRM all you have to again go to the legal as well as financial side then check out for appointments, leaves and other details of the employees of the company. the basic thing which you have to keep in mind that the company/person for whome you are doing the due diligence audit whether that co is going to be benefited by investing into other company or whether if both join together they will surview. hey this needs a team with combination of Chartered accountant, company secretary lawers, tax practicioners etc. All the Best !

Vineet Kumar (CA) (65 Points)
Replied 13 January 2008

Hi Freind, As u may be aware that due diligence is done at the time when some some co. is planning to acquire some other co.,so the most important thing in due diligence is that u must think from the mind of buyer that if u want to purchase some thing then what are its benefits like future profitability,contingent liabilities,past performance,past profit trends,production capacity,overheads etc. Its a open thing whatever u want check that. But from the angle of buyer company.