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Due Diligence Report Preparation

The document outlines an agenda for a two-day due diligence report preparation course. The course covers topics such as evaluating management, understanding company operations, performing market due diligence, accounting due diligence, legal due diligence, valuation due diligence, and intellectual property due diligence.

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María de los Angeles
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129 views

Due Diligence Report Preparation

The document outlines an agenda for a two-day due diligence report preparation course. The course covers topics such as evaluating management, understanding company operations, performing market due diligence, accounting due diligence, legal due diligence, valuation due diligence, and intellectual property due diligence.

Uploaded by

María de los Angeles
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Due Diligence Report

Preparation, Due Diligence


Writing and Methods of Due
Diligence
Agenda:
DAY ONE
Session 1: Introduction
         The due diligence obligation
         Risk and vulnerability
         Levels of fiduciary duties
         Experts and non-experts
         How much due diligence is adequate?
         Use of limited time, personnel, and resources
         Due diligence team
         Creating an effective due diligence plan
         Lists and questions
         Use of representations and warranties
         Confidentiality agreements
         Relative responsibilities of agents, participants, underwriters, and others

Session 2: Critical Due Diligence


         Evaluating due diligence performed by others
         Reading reports critically
         Key questions and responses

Session 3: Managers and Directors


         Primary importance of assessing management
         Examining competence and integrity
         Planning as an indicator of management ability
         Standards for management compensation
         Relation between management and board of directors
         Analyzing corporate governance issues
         A look at Tyco
         Ownership by management and directors
         Promotion and succession as indicators
         Interviews
         Sources of information managements and directors
Session 4: Company Operations and Structure

         Understanding the process of the business


         Following the sequence of operations
         Company tours and how to manage them
         Discussions with personnel: executive and middle management; line staff and
workers
         Sources of Information: publications, internet, suppliers, customers,
competitors, and others
         Implications of corporate structure: ownership and reporting relationships
         Dealing with international subsidiaries

Session 5: Market Due Diligence


         Porter’s Five Forces: suppliers, customers, competitors, barriers to entry,
substitutes
         Sources of market and competitive information
         Timing issues: seasonality, cyclicality, corporate life cycle
         Creative methods of uncovering market knowledge

DAY TWO:

Session 6: Accounting Due Diligence


         What can be learned from the statements
         Accounting standards as an indicator
         Adequacy and consistency
         Change of standards, change of auditors
         Revenue and cost recognition
         Use of extraordinary items, reserves
         Key off-balance sheet issues
         Private and public companies and their accountants
         Large and small audit firms
         Use of SPVs, VIEs, SIVs
         Accounting for repos and similar financing vehicles
         Due diligence effect of Sarbanes-Oxley, the Patriot Act, Basel II, and other
regulation
Session 7: Legal Due Diligence
         What attorneys must review
         Deal-specific attorney due diligence
         Viability of transaction, authority of signatories
         Legal vulnerability in company and transaction
         Perfection of security interests
         Environmental hazard issues

Session 8: Valuation Due Diligence


         Importance of valuation in different transactions
         Who performs valuation?
         Types of values
         Key valuation methodologies – strengths and weaknesses of each
         What must be examined to confirm valuations
         Fraudulent conveyance
         Fairness opinions

Session 9: Intellectual Property


         Increasing importance of IP due diligence
         Complexity of task, risks involved
         Copyrights
         Patents
         Trademarks
         Trade secrets
         Process vs. design or formula patents
         Timing issues
         Licenses
         Outsourced development
         Methods of research

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