Due Diligence Flashcards
How is due diligence linked to auditors
Do diligence is typically required when one company is proposing to take over another company and is fact-finding.
A due diligence assignment could be either:
A review engagements to provide limited assurance (negative opinion) see effect than nothing worrying has been found
A agreed-upon procedure engagement to report fact-finding
What would the letter of engagement for diligence Be
Often due diligence assignments are agents. For example the takeover is happening to rescue a feeling company.
Typically the engagement letter will cover:
Extensive work
Type of report
Timescale
A clause saying that the takeover is the decision of the client
A clause stating that Miss statements made by the target company might not be discovered, that all irregularities might not be found and a description of the nature of the work.
A clause stating that the auditor is dependent on the cooperation of the target companies management
The fee
