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3.3 Benefits of engaging an advisor to carry out due diligence

 Decrease management time spent assessing the acquisition

 Identify operational issues and risks with the target company

 Liabilities can be evaluated and identified

 Identify assets not recognised in the financial statements e.g. internally
generated intangible assets.

 Gathering information on other relevant matters that could influence the
investment

 Enhance the credibility of the investment decision

 PlaNning the acquisition – e.g. provide advice on restructuring and change
management.

 Claims made by the vendor can be substantiated

 Evaluation of possible post acquisition synergies and economies of scale

3.4 Procedures

Due diligence procedures will involve:

 Enquiries of relevant parties

 Analytical procedures

 Inspection of documents and records

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