Independent Financial Insight for
Critical Business Decisions

Financial due diligence focuses on financial performance, earnings quality, assets, liabilities and cash flows. Tax due diligence examines relevant tax filings, payments, outstanding demands, compliance matters and potential tax exposures. The two reviews complement each other, as tax liabilities and compliance issues can influence the financial assessment of a business.

Due diligence is commonly considered before an acquisition, investment, business sale, strategic partnership or other significant commercial commitment. It may also be appropriate when financial discrepancies or material concerns arise. Starting early can provide more time to obtain records, investigate issues and incorporate relevant findings into negotiations or transaction planning.

Due diligence helps a prospective buyer assess whether the available financial information supports the proposed transaction. It can bring potential liabilities, earnings concerns, working capital requirements and tax exposures to attention. These findings may influence valuation, negotiations, transaction terms or the decision to proceed, subject to the scope and limitations of the review.

Fees depend on the size and complexity of the business, transaction value, scope of review, number of entities, quality of records and expected reporting requirements. A focused financial review may require substantially less work than a complex acquisition assessment. Markwart Consultants can discuss the proposed scope and provide a fee proposal based on the engagement requirements.

The duration depends on the size of the business, transaction complexity, availability and quality of records, responsiveness of management and extent of investigation required. A focused review may be completed faster than a multi-entity or complex transaction engagement. A practical timeline can be discussed once the objectives, scope and information requirements are established.

Typical documents include financial statements, trial balances, general ledgers, bank statements, tax returns, GST records, receivables and payables ageing, loan schedules, major contracts and details of contingent liabilities. The precise list varies with the business and transaction. Additional documents may be requested to clarify significant balances, unusual transactions or identified concerns.

Due diligence can identify potential undisclosed liabilities, unusual balances, unresolved tax matters and other concerns evident from the information reviewed. However, its effectiveness depends on the scope, reliability of records, access to information and procedures performed. It cannot guarantee the discovery of every concealed obligation, fraud or risk.

Buy-side due diligence is conducted to support a prospective buyer or investor evaluating a target business. It focuses on relevant financial information, earnings quality, liabilities, working capital and other agreed areas of risk. The findings can inform valuation, negotiations, transaction structuring and the decision to proceed with the proposed acquisition or investment.

Vendor due diligence involves a review commissioned by a business preparing for a potential sale or investment transaction. It can help identify financial reporting gaps, inconsistencies and issues that prospective buyers may examine. Addressing these matters early can support transaction preparation, although the review does not guarantee a successful sale or a particular valuation.

Yes. Startups may benefit from financial due diligence before raising capital, onboarding strategic investors, acquiring another business or entering a significant partnership. The review may focus on financial records, cash burn, revenue quality, liabilities, tax compliance and financial projections where relevant. The scope should reflect the startup's stage, business model and available information.

Due diligence can help investors evaluate a private company's reported performance, financial position and potential exposures before committing capital. Its relevance and scope depend on the size and nature of the investment, the information available and the risks involved. Financial due diligence may need to be supplemented by legal, commercial or other specialist reviews.

Due diligence may reveal factors that influence the assessment of a business's value, including earnings sustainability, debt, working capital requirements, contingent liabilities and financial reporting concerns. Findings can inform valuation assumptions and negotiations. Due diligence does not independently guarantee a valuation; the final assessment depends on the valuation method, commercial context and other relevant factors.

A Chartered Accountant with relevant competence can undertake financial due diligence within their professional capabilities and the agreed engagement scope. The nature of the work, reporting responsibilities and any applicable professional requirements should be established in advance. Legal, technical, environmental and other specialist matters may require appropriately qualified professionals.

A statutory or financial statement audit is performed for its defined reporting purpose and provides an opinion in accordance with the applicable framework and scope. Due diligence is generally transaction-focused and tailored to specific decision-making needs. It may examine selected financial, tax and commercial issues in greater detail, but it does not automatically replace a statutory audit.

Tax due diligence can identify potential exposures arising from reviewed tax returns, payments, assessments, notices, outstanding demands and relevant compliance records. The extent of identification depends on the documents available, periods covered and procedures agreed. Where issues are identified, further investigation or specialist tax advice may be necessary to assess their implications.

Discrepancies are assessed in context to understand their nature, significance and possible implications. Additional records or explanations may be requested, and further procedures may be recommended where appropriate. Depending on the findings, the client may consider revising assumptions, seeking specialist advice, negotiating transaction terms or reassessing whether to proceed.

No. Due diligence improves visibility into the information and risks examined, but it cannot eliminate all uncertainty or guarantee future business performance. Its effectiveness depends on the agreed scope, access to reliable information and procedures performed. Buyers should consider the findings alongside commercial assessment, legal advice and other relevant specialist reviews.

Consider the consultant's relevant financial and tax expertise, understanding of your transaction objectives, proposed scope, reporting approach, confidentiality practices and ability to communicate material findings clearly. Ask how the engagement will address your key concerns and what limitations apply. The right consultant should align the review with your decision-making requirements rather than offer an undefined, one-size-fits-all exercise.

Yes. Due diligence can be tailored to MSMEs, closely held companies, partnership firms and smaller businesses. A focused review may examine financial performance, liabilities, tax compliance and working capital without requiring the scope of a complex acquisition engagement. The appropriate level of review depends on the proposed decision, available records and material risks.