Journal of Accounting and Management Information Systems (JAMIS)


DUE DILIGENCE – WHY, WHEN, WHAT

Supp/2008 ,   p553..563

Author(s):  
Luminiţa RISTEA


Keywords:   Due diligence, merger, acquisition, business risk profile

Abstract:  
Due diligence investigation (DD) has become an integral part of merger and acquisition business inside each country as well in case of cross border transactions. The main purpose of any DD is the production of a risk and business orientated profile of the target company at the initial phase of the acquisition process, rather than the determination of purchase price.  A properly executed DD provides the purchaser with knowledge about the target company and minimises the risk of unexpected surprises in connection with an acquisition and therefore this theme is structured to present the primary stage of any DD investigation:
• knowledge of the business area and of the target company
• establishing the terms of reference
The author tries to offer to the practitioners and also the students the most important items that came up due to the past experience during the DD engagements


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