EXPANDING THE NATURE AND SCOPE OF DUE DILIGENCE

The traditional merges/acquistions due diligence process concentrates on tangible assets and the firm's internal environment. Due to a variety of factors, including a changing legal environment and the high cost of failure, a model is developed for an expanded view of due diligence. The model developed enables the acquiring entity to assess both tangible and intangible assets of the target firm and its internal and external environment. This is accomplished by sequentially performing seven audits: financial, legal, macroenvironmental, marketing, management, production and information systems.