Fall 2010 issue of Horizons

General Topics – continued

2. Accounting & Financial • Analyze the appropriateness of accounting policies • Evaluate any balance sheet exposures, including asset existence and valuation and unrecorded liabilities • Determine working capital and capital expense requirements • Review tax returns and identify potential exposures 3. Operational & Governance • Evaluate the corporate governance structure • Review employee benefit plans • Assess the quality of financial management • Analyze the technology, including the appropriateness and scalability of systems, security and potential integration issues

“Red flags” to be aware of before closing the transaction: • Unaudited financial statements

• Qualified or “going concern” audit opinions • Errors in financial statements or tax returns • Lack of qualified financial management • Poor internal controls • Auditor letter indicating significant deficiencies or material weaknesses • Significant audit adjustments • Customer or vendor concentrations • Related party transactions not at fair value • Significant unresolved litigation or contingencies Please contact us for more information on financial due diligence and ways your company can properly assess another before a transaction.

RubinBrown’s Assurance Services Group

Dan Raskas Partner-In-Charge Mergers & Acquisitions Services Group dan.raskas@rubinbrown.com 314.678.3530

Fred Kostecki, CPA Partner-In-Charge Assurance Services Group fred.kostecki@rubinbrown.com 314.290.3398

Todd Pleimann, CPA Managing Partner Kansas City Office todd.pleimann@rubinbrown.com 913.491.4411

Russ White, CPA, MBA Partner Assurance Services Group russ.white@rubinbrown.com 303.698.1883

Raise Your Expectations

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