A very well-known term in the business sector is of “Due Diligence”. So what does Due Diligence mean? Due diligence is the term that is used to describe the process that needs to be undertaken by a person or company who is looking forward to entering a deal with another company . An example of such dealing would be a merger or acquisition. In case of acquisition Due Diligence helps the buying company to get a better understanding of the company that is willing to transfer its operations to the buyer.
In Due Diligence a buyer hires an individual evaluator to recognize & verify the values of assets, liabilities & performance indicators (Revenue, Profits) of the selling company. They will also be looking for appropriate information regarding the accounting records, operations of the selling company, how the competitors of selling company are performing compared to them.
Why do companies need to do Due Diligence?
- To avoid any unexpected liabilities.
- To help the companies make an informed decision.
- To identify any possible problems.
- To evaluate costs & benefits
- To be aware of the risks associated with the transaction the company is intending to undertake.
Due Diligence requires that the evaluators exercise a degree of due care as the investors decisions depend on such information. Having carried out a number of operations in the field of Due Diligence we at Oxford Auditing have experienced individuals who apply their expertise & knowledge to produce the best possible outcomes for the clients.
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