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Due diligence
In the context of a due diligence audit/assessment, a systematic and meticulous assessment of the objective of the contract takes place. The objective of the contract can for example be the sale or acquisition of participation in a company or in real estate. Besides economical factors, legal, fiscal and cultural issues have to be considered. Especially due diligence, which encompasses the field of the mentality of a company, is of importance when a company takes over another company and thus, two different corporate cultures have to merge.
The term “due diligence” is not explicitly defined. Basically, it means as much as “observing a high degree of care”. Often, the German term “proof of proposal” is used synonymously. The point of performing a due diligence is to collect as much information as possible about the company in question and assess them in regard to the required terms. The values and chances of a company are usually alleged by the current owners and are thus to be reviewed for verification/recoverability. Additionally, it is particularly important to identify legal and financial risks (so-called dealbreaker), which might possibly be contrary to an acquisition or a sale.
As a team of accountants, business economists, attorneys and tax consultants, MerzArnoldWüpper offers you an experienced and capable team, which will answer all significant questions and cover all important areas for you. Criteria for a due diligence assessment can cover the following areas:
- Quality of the management and top-level employees
- Skills of the employees and their willingness to change
- Existence of clear goals of the company or a part of the company
- Clear appropriation of funds
- Closed or open information policy and communication within the company
- Documentation of procedures and orientation on the procedures
- Degree of customer satisfaction and existence of a measuring instrument
- Level of employee satisfaction and existence of an employee survey
- Assessment of the social responsibility/image of the company in public
- Assessment of output and balances of a company
- Assessment of the existence of a quality management within the company
- Analysis and appraisal of the legal, especially the fiscal and corporate law, company structures for reasons of risk analysis and optimization of the structure
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