Due Diligence Audit

Due Diligence Audit is a comprehensive review of financial position, organizational structure and management system, internal control system, utilization of resources in the form of loan and investment and risk management system of the bank. This includes reviewing a company's risk factors, profitability trends and core competencies. The purposes of a due diligence review are to assess the value of the asset and to identify and evaluate any risks involved in the transaction and hence comfort management on the matters such as:

Fair position of the assets, liabilities and operational results as presented in the financial statements.

Existence of Assets and their ownership.

Possible exposure of future liabilities including contingent liabilities.

Future viability

review procedure does not constitute an audit, the objective of which is to express an opinion on the financial statements or specified elements, accounts or items thereof. Similarly, review procedure does not constitute an investigation of an issue, the objective of which is to determine the errors or frauds.

The main components of due diligence shall be: Financial( e.g. financial history or accounting systems) Financial due diligence should focus on the company's overall debt burden, the availability of working capital and the company's debt/equity ratio. Financial due diligence of a company involves collecting all of the company's financial statements, credit report, pro forma (projected into the future) financial statements, debts, assets, accounts payable and receivable and overhead costs, among other information. Unlike an audit which is concerned with historical financial statements and provides an opinion as to whether the financial statements represent a "true and fair" view of the company's operations, due diligence would incorporate a greater scope. A financial due diligence review would not only look at the historical financial performance of a business but also consider the forecast financial performance for the company under the current business plan and consider the reasonableness of such forecasts.

Legal (e.g. governing documents or contracts of employment)

Legal due diligence should focus on finding major legal risks such as lawsuits against the company, substantial regulatory noncompliance, possible corporate fraud and contractual burdens. Legal due diligence also takes into account the closed litigation, outstanding litigation or threatened litigation. Legal due diligence also involves looking into the legal status a company as well as any documents the company is legally required to keep on hand.

Strategic and operational (e.g. organisational culture or IT systems)

Evaluation