Reduce information asymmetry
The involvement of a Certified Auditor creates confidence in figures, financial statements and other data and thus reduces information asymmetry.
Business needs confidence
Confidence is not only created, where there is a legal obligation to have single or consolidated financial statements audited. There are many other situations, in which the judgement of an auditor helps increase the credibility of facts and figures and gives confidence to the parties involved.
The auditor has a neutral view on the actual situation and gives his opinion on it.
Please find a few examples below:
A review by an auditor could be called the "light version" of an audit. The examination will be based rather on analytical procedures. It applies to quarterly reports, interim financial statements or closing accounts for transaction purposes and other.
Examination of closing accounts and purchase price clauses
Transactions (e.g. M&A deal, entry of a new shareholder or partner) do not always take effect on a balance sheet date. Interim financial statements might be necessary.
SPAs (Share Purchase Agreements) quite often include rules, that the purchase price depends on certain ratios deducted from financial statements as of a specific date. These rules are often amended by special provisions, e.g. certain assets shall be considered at their fair value instead of their book value or shares in subsidiaries shall be considered at their pro-rata equity value.
Each figure counts, because it has an immediate impact on the purchase price. A good reason to have these figures reviewed by an independent auditor.
We will gladly take care of it.
Valuation of businesses
Business valuations are requested in various occasions: the intended purchase/sale of company shares, the retirement or squeeze out of a shareholder, legal or anticipated succession, tax reasons or simply the need of an impairment test for accounting purposes.
According to your individual case, we have the appropriate valuation tool at hand - IDW S1 expert opinion, indicative business valuation or simplified methods. We will match costs and occasion.
Financial Due Diligence
Financial Due Diligence is part of the Due Diligence, investors should perform before closing an M&A transaction.
Investors involve us to screen their target - from a commercial as well as from a financial (balance sheet) point of view. We optionally involve specialists, who take care of the Tax Due Diligence and Legal Due Diligence. Our network also includes experts, who can screen the existing IT system. A view on the necessary costs to de-integrate complex IT systems from an existing group structure can be enlightening.
You prefer a cost-conscious procedure? We act in two phases: during a first phase we concentrate on identifying the main risk areas. We will discuss them with you. During a second phase (optional) we enter into more detail - where you want us to.
You are on the vendor side and want to put together documents for a potential investor in a proactive way?
We will gladly assist you. Contact us and describe your case.
P.S.: Nous parlons français.
Purchase Price Allocation (PPA)
The Share Deal is done. Purchase Price is settled. But for purposes of group accounting a lot needs to be done: what assets (and liabilities) needs the purchase price to be allocated on? What further assets need to be considered, that have not been acitvated so far? At what value?
We support you at performing the Purchase Price Allocation (PPA), including the necessary valuations.