Due Diligence, Verification and Valuation
What types of businesses have you completed accounting due diligence and verification for?
Ascendia Valuation Accountants Noosa, Mooloolaba and Brisbane offer due diligence and veriification services on behalf of a business purchaser and also, as required, on behalf of business vendors in preparation for sale.
Our accountants, Sunshine Coast and Brisbane based, have experience in providing these services to:
- Management Rights Businesses
- Real Estate Agents
- Restaurants / Cafe's including franchises
- Transport Businesses
- Trade Services and Professional Services
Do I need a specialised due diligence or verification service provider?
Not in our opinion.
We do not believe there is any value for you in paying extra for a self appointed 'specialist' in this field, because all qualified accountants holding a public practising certificate are held to the same professional standards at law.
In short, verification services are accounting services. The standards of service provision are governed by the relevant accounting professional associations. Therefore we recommend you use a qualified practising accountant with CA / CPA or IPA public practising certificate.
Our commercial experience backs this up. Our accountants on the Sunshine Coast and in Brisbane have worked in conjunction with specialised verification service providers in specific business areas and found that, unfortunately they often do not provide any better quality verification methodology or reporting, and yet tend to cost more than a certified practising, chartered or public accountant with experience in the area.
What does the verification or due diligence process involve?
Usually the due diligence verification involves:
- Adjustments to financial accounts for matters not related to the ongoing business, and
- Assurance of some elements of the financial records.
In reference to any assurance procedures involved, there are industry standards regarding different businesses and also specific risks that should be managed in verifying business records. These involve using different procedures depending on the business type and the scope of the service required.
Once our Sunshine Coast & Brisbane accountants know the business type, have a copy of your latest financial accounts, and have had a brief discussion with you, our Ascendia Sunshine Coast accountants can advise you on the service required and give you a fixed fee quote.
Due to the high level of experience we have had with providing verification services for Management Rights purchasers, our accountants in Noosa, Mooloolaba and Brisbane, are able to provide a Fixed Fee Special Offer for Management Rights Verification.
Do I need a specialised 'Business Valuer'?
Not in our opinion.
There are a number of business valuation methodologies and all involve using the financial statistics from the verified business financials.
A valuation involves applying an appropriate / industry standard valuation methodology to the financial statistics provided by your verification service provider.
The variation in the valuation factor(s) applied in the value formula to your business figures arises from the identification of any issues potentially impacting on future financial performance of the business in question, as well as from its current financial return when compared to other businesses.
The comparative financial performance can often be identified from recognised published financial benchmark sources.
The comparative risks potentially impacting on the financial performance can be identified by your qualified practising accountant with commercial experience in the industry and with reference to:
- Analysis of the existing financial issues and variances evident in the financial reports (such as expense, income, asset and liability items).
- Any matters which are apparent in the business which can impact the rights, obligations, income and expense, assets and liabilities of the business (including impact of legal arrangements)
If you are interested in valuation reporting services please contact us and ask to speak with the Managing Director, Sherman Jenner.
If you require assistance in an area that involves a business in which we have limited experience, we will refer you to another qualified practising accountant who does have recent experience in the area.
Is there any situation where I should ensure I use a CPA, CA or IPA in certified public practice for due diligence or verification services?
Due diligence and verification accounting services, whether for a purchaser investigating a potential purchase, or vendor in preparation for a sale, involve assuring the validity of the information about the individual business.
It is not merely a process of applying the business data (provided by the business owner’s accountants or the business owner themselves), to benchmarks obtained from an "expert" or specialist in the industry, or a Business Benchmarks publisher.
Therefore, in any situation where you are relying on the financial information you have been provided,you should only use the services of professionally trained and certified personnel. In other words, we recommend you use a qualified practising accountant to assure the validity of the financial information.
Do I need industry specialist advice before I buy a business?
Knowledge of like businesses in the area, or any facts about the history of specific businesses or the industry, can be useful in considering the relative competitive standing of the business you are considering buying.
Industry specific financial benchmarks, which are based on data from all over Australia, are published and readily available to assist you to see how a business should be performing on average.
In addition, most substantial and experienced accountancy firms who've been providing these services will have a good knowledge of the relative financial performance of comparative businesses in the area.
However it is important to use a qualified public accountancy professional with experience in the type of business you want to buy, to undertake an accountancy activity to investigate and check the veracity of the businesses financial information and reporting provided.
Our Ascendia accountants Brisbane & Sunshine Coast based offer objective and independent due diligence services verifying and advising on the accuracy of businesses accounts and financial information.
We also offer due diligence opinions on the broader business risks to further assist you to consider an appropriate value of the business being considered.
We've been doing this for 13 years. Benefit from our experience. Contact our Brisbane or Sunshine Coast accountants in Mooloolaba or Noosa to enquire further about how we can help you.