What is Due Diligence?
The concept of Due Diligence involves investigation, verification, and review of all the legal documents of a business. Due Diligence is a process of collecting the information of a company, understanding it and evaluating it to highlight any potential risks. These risks may be associated with the company’s legal structure, tax compliance, employees, customers, market or assets and liabilities.
Due Diligence enables the company’s buyer to investigate and mitigate any risks associated with the mergers and acquisition process. Due Diligence of a company can pinpoint the critical information about the target company and put red flags on the high-risk areas that may cause future legal problems for the buyer company.
Why Due Diligence?
It is often done when acquiring a business but there are many other circumstances in which due diligence might be necessary as well and is required. Due diligence defends both parties but primarily the buyer. It uncovers the liabilities which are potential and financial issues and make sure that everything is transparent instead of hidden.
Why Due Diligence Audit?
The decision to put together a major purchase, merger, acquisition, or investment should come only after a comprehensive and structured process of what is rightly called “due diligence” that’s custom tailored for the undertaking. Many mergers and acquisitions succeed, but a great many more fail for lack of suitable research or preparation. Perform a due diligence audit and you will have done your best regardless of the outcome.
Types of Due Diligence Audit
Following are the most common type of due diligence audit in UAE.
Financial Due Diligence
Audit service provider in Dubai, UAE review the transaction data, historical trade results, cash flow & balance sheet of a company to validate the financial statements. The purpose of hiring financial due diligence auditors is to know the financial risk & forecast of the company. It also includes funding requirements of a business in future.
Commercial Due Diligence
Commercial due diligence will determine the various commercial factors including competitors analysis, target market research, product reviews, service feedback & any other data the acquirer want to know.
Operational Due Diligence
The operational due diligence involves examining the non-financial factors of a company. To have the better understanding of business operations, organizational structure, internal process & system, performance evaluations of the management team and HR process of a specific company, auditors in Dubai, UAE conduct this type of due diligence audit.
Legal Due Diligence
Legal due diligence helps to evaluate any legal risk involved with the company. It identifies any legal disputes whether with local bodies, competitors or with its own employees.
How Horizon Biz Consultancy can help you?
We offer all kind of due diligence audit services to help you in making a decision to merge or acquire a company in the Dubai or UAE without getting into any kind of post-transaction trouble.
For more information related to Due Diligence Audit, fill out the contact form and connect with one of the best & professional auditors in Dubai & UAE.
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