Acquisitions of companies sometimes are not successful because they suffer from a failure of origin. During the acquisition process may have lacked a deep and effective review of the business of the company acquired.
Acquisition Audit - Why Accomplish?
In any asset sales process, the seller always exalts the qualities of his product, seeking to cover up or even omit possible flaws.
The existence of unrecorded liabilities, contingencies of any nature not presented to the buyer and oversized projections may cause a major headache to the buyer in the future management of the acquired company.
Having an audit team that conducts an effective Acquisition Audit is for the acquirer of a company a powerful weapon that will rid you of future problems in running the new business and minimize future and potential losses.
The Acquisition Audit
The acquisition audit involves an accurate review of the accounting documents of the company, seeking to verify:
- Overvaluation of assets and revenues;
- Undervaluation of liabilities and expenses;
- Existence of unaccounted-for loans;
- Existence of unaccounted tax liabilities;
- Existence of unrecognized or informed tax and labor contingencies;
- Existence of unsecured guarantees, sureties and mortgages.
- Existence of oversized budgets and projections;
- Analysis of the state of the company's assets as to its real market value;
- Analysis of the existence of lawsuits of different natures;
- Existence of non-recognized environmental liabilities or contingencies;
- Analysis of the market in which the company operates, seeking to identify possible future problems.
Advance Auditores can advise the acquirer in the purchase process, aiming at establishing payment methods that link payments to possible unregistered liabilities identified by our work .
Advance Auditores professionals have extensive experience in performing Acquisition Audit work.
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