Due Diligence (Audit of the Acquired Company) is the process of thoroughly analyzing and evaluating the business, financial condition, assets, liabilities, and documents of a target company, conducted prior to a transaction involving acquisition or merger. The purpose of this audit is to identify risks, hidden liabilities, errors, and issues that may impact the success and efficiency of the transaction.

Key aspects typically assessed during the Due Diligence process include:

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  Financial condition of the company: analysis of financial statements, evaluation of revenues, expenses, assets, and liabilities.

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  Legal aspects: review of legal documents, contracts, licenses, agreements, potential lawsuits, and obligations.

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  Operational activities: assessment of business processes, management systems, customer base, suppliers, and partners.

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  Internal control and risk management: evaluation of internal control systems, risk management procedures, and compliance with legislation.

As a result of the Due Diligence audit, the acquiring company gains insights into the risks and opportunities associated with the target company, enabling informed decision-making and assessment of the transaction's feasibility.

This process contributes to risk reduction and enhances the success of acquisition or merger transactions.