• Call us: +971 4 223 9633
  • Email: info@jasmaccounting.ae
Have any questions? Get An Appointment

Due Diligence Audit

Home > Due Diligence Audit

Make An Enquiry

Sidebar Contact Form

What is Due Diligence Audit?

The due diligence service is an investigative process aimed at validating information accuracy, assessing legal aspects, and determining the overall feasibility of a deal for the buyer. It entails examining the business's assets, liabilities, profitability, and associated risks, offering insights into its financial health. This process aids in evaluating the viability of a purchase or investment, guiding the buyer on whether to proceed at the proposed price, renegotiate, or reconsider the deal altogether.

Beyond business acquisition, due diligence is crucial in various scenarios such as mergers, agreements, and credit extension. Professionals assess financial and non-financial aspects, focusing on liabilities during investigations.

Objectives of Due Diligence

The following can be the objectives of any typical due diligence with respect to buying a target company:

  • Due diligence collects information about the target company.
  • Due diligence conduct SWOT analysis to reveal the strength and weaknesses of the target company
  • It improves bargaining power or position.
  • It provides informed decision to take accurate action.

Areas of Due Diligence Service

There can be various areas for a due diligence, however it can be mainly divided into the following major areas:

1. Operational Due Diligence

Conducting due diligence assesses a company’s operational viability, ensuring the absence of issues. For example, in a merger, operational due diligence verifies the feasibility and identifies any potential issues for a seamless integration.

2. Financial Due Diligence Audit

Financial due diligence involves examining the financial aspects of a target company, including assessing financial statements, reviewing cash flows, analyzing accounting books, and evaluating accounting policies and internal controls.

3. Tax Due Diligence

Financial due diligence involves examining the financial aspects of a target company, including assessing financial statements, reviewing cash flows, analyzing accounting books, and evaluating accounting policies and internal controls.

4. Information System Due Diligence

Modern businesses heavily rely on IT systems, and proposed mergers have faced rejection due to incompatible systems. Information System Due Diligence ensures the target company’s IT systems are suitable, compatible, and generate accurate, reliable information.

5. Legal Due Diligence

This form of due diligence assesses the target companies’ compliance levels with laws and regulations, encompassing all crucial legal aspects.

6. Environmental Due Diligence

For certain industries, evaluating the environmental aspects of the target company is crucial and warrants careful consideration.

7. Human Resources Due Diligence

This facet of due diligence encompasses comprehensive fact-finding related to the target’s human resources, including employee count, HR policies, salary structures, employment contract terms, and retirement benefits.

Due Diligence Services in the UAE

As experienced consultants, JASM conducts due diligence adhering to international standards, industry benchmarks, and historical financial data. We support clients in ensuring secure transactions, providing maximum assurance and protection through our knowledgeable professionals with diverse industry expertise. JASM guarantees timely, quality deliverables despite industry challenges and limitations.