The Research On The Risk Prevention And Optimization Of Financial Due Diligence In M&A

With the increasing number of M&A activities,due diligence has become a routine work.High quality financial due diligence can change the situation of asymmetric information.Due diligence is the foundation of M&A risk management.The difficulty of due diligence is increasing with the rapid development of market economy and the globalization of mergers and acquisitions.An effective due diligence risk management system,on the one hand,could guard against potential risks.On the other hand,it helps firms to create continue benefits.This paper combined theoretical analysis with case analysis.In the framework of ERM risk management theory and the Central enterprises comprehensive risk management guidelines,The paper constructed the financial due diligence investigation risk prevention system,and it took the T company’s financial due diligence as the breakthrough point to comb the current situation of the due diligence risk management.The current problems of due diligence risk management mainly include weak risk management consciousness,organizational structure deficiency of risk control,low level of operational risk control,lack of communication,and relevant supervision and control system deletion.Considering the main problems existing in the Z industry,firm industry characteristics and the model of due diligence risk prevention constructed in this paper,this paper puts forward the optimization suggestions to improve the control system of the Z accounting firm risk.It includes strengthening the accounting firm organizational structure,establishing the firm risk prevention mechanism,increasing the due business risk control level,establishing a firm internal and external supervision and assessment system.In view of the importance and urgency of risk management,accounting firms risk management system should be transferred from the real-time control and afterwards control to the before,during and afterwards control.The full range of risk control system improves the effectiveness and timeliness of risk management.The construction of risk oriented management model enhances the firms ability to resist risks,and it makes firms manage to control the foreseeable future risk through the firm’s daily operations management.In this paper,the theoretical framework is optimized for the specific application of the Z accounting firm’s risk management.And the accounting firm’s industry characteristics are also taken into account.At the same time,the status of Z accounting firm’s due diligence investigation is probably common in small and medium accounting firms in China.Therefore this paper could provide a reference to the financial due diligence improvement of other similar small and medium-sized accounting firms.