Research On The Financial Due Diligence Of H Company Restructuring And Merger

With the rapid development of the economy and the capital market of China, competition between enterprises is becoming increasingly fierce. According to the law of survival of the fittest, enterprises reorganization merger and acquisition activity has become increasingly common for their survival and development. Due diligence is essential in the process of mergers and acquisitions, which includes three parts:finance, law and business mode.In the finance part of due diligence, there are several factors which will cause the due diligence result differed from the actual fact:the complexity of enterprise, industry variability, personnel quality and ability of due diligence investigators, preciseness of due diligence review process and etc. In order to avoid the mergers and acquisitions failure caused by inaccurate information provided by due diligence, acquirers will usually employ senior accountants and auditors which will investigate the target company.However, due diligence of finance in mergers and acquisitions is different from other general routine audit, such as:listed companies’annual financial audit and economic responsibility audit. Due diligence of finance in mergers and acquisitions is straight to the goal, for example:the financial situation which investors concern about, trading purpose, factors to achieve trading, and other issues which investors should learn before trading. Therefore, the procedures of financial due diligence in mergers and acquisitions are different. The audit methods mentioned in this paper is specifically for the acquisition of target company’s specific circumstances.The paper bases on the accounting firm entrusted by the acquiring firm, Combined with my 10 years of IPO audit and restructuring of experience, investigating it how to service for the aquiring firm H company and providing analysis and judgement for this mergers and acquisition.This paper is consisted by four part.The first chapter is the introduction,mainly discribing the research background and significance> domestic and overseas situation、methods、strategies and framworks and contributions.The second chapter is the theoretical basis of due diligence,which outlines the concept objective、 methods、role and importance of due diligence.The third chapter is H company case analysis.This chapter researches the agency how to perform due diligence to verify the veracity of performance and sustainability and tax risk, which is basicing on the background of transaction、due diligence procedures and H company’s profile.The last chapter is the results of analysis and policy recommendations.In order to make mergers and the work of acquisition due diligence do better,this paper will remind acquirer of the financial risk which existing and other risks after mergers and acquisition in the company.