Page 234 - AAA Integrated Workbook STUDENT S18-J19

Chapter 15 4

1.3 Scope of work

Due diligence looks at:

 Current issues affecting the company

 Prospects for the future

 Past performance

The main purpose of due diligence is to ensure the acquirer has full knowledge of the
target company such as:

 Financial performance and position

 Operational matters

 Market position and commercial matters

 Legal matters

 Tax matters

 HR matters

1.4 Type of engagement

Due diligence may either be conducted as

 an assurance assignment (where a professional conclusion is expressed), or

 an agreed upon procedures assignment (where the accountant presents the
client with factual information they have requested about the target company).

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