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Due Diligent Report Checklist

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Due Diligent Report Checklist
Comprehensive M&A due diligence checklist for buyers
1. General a. Overview i. Read the Letter of Intent and Definitive Agreement ii. Read the latest available interim financial statements related to the Target. iii. Obtain copies of internal financial statements for the historical period. Determine that such financial statements reconcile to trial balances/general ledgers for each period in the historical period iv. Interview Target management and key accounting personnel to obtain an understanding of the operations and the accounting, reporting and control systems v. Understand key terms of all significant customer and supplier contracts vi. Understand key terms of all significant lease agreements b. Accounting policies i. Summarize significant accounting policies adopted by Target, including judgmental reserves and estimates ii. Obtain detail of any changes in accounting policies/restructuring/impairments recorded by the Target. iii. Understand any change in accounting methods or principles during the last five years and the reasons such change was undertaken. iv. Review any letters from the Company‟s outside tax advisors and accountants during the last five years regarding the Company‟s accounting controls, method of accounting and other procedures. v. Review any non-GAAP financial measures used in public documents, accompanied by the most directly comparable GAAP financial measure and reconciliation to GAAP, along with reasons for use of non-GAAP measures. c. Audit / Review Workpaper Review i. Identification of scope, audit procedures, control issues, passed adjustments, contingencies, accounting policies, etc., as it relates to Target ii. Read the management representation letter, if applicable d. Contracts i. Review contracts which have a remaining term in excess of one (1) year. ii. Review a schedule of any transactions (including purchase, sale, financing or loan agreements) between the Company and any shareholder, member, officer, director, employee or

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