What Really Goes into a Due Diligence Checklist?  

  

Due diligence, according to your text, can potentially be a main determinant of whether or not an acquisition bucks the trend of unsatisfactory results. Since a significant number of acquisitions fail to live up to expectations, how is it that a due diligence process can provide such a benefit? An inadequate evaluation of the target seems hard to believe, noting that many times very sophisticated entities or individuals carry out this process like management consulting firms, investment banks, legal specialists, etc. Your assignment in this exercise is to research and produce a due diligence checklist that if implemented will provide to the extent possible a robust assessment of a target firm and attempt to prevent the aforementioned inadequate evaluation. 

  

Working in teams, utilize library databases, trade associations, merger and acquisition clearing houses and the like to develop by category a due diligence checklist. This checklist is to be comprehensive in that it should cover the important topics as well as dive into the details underneath each one. Simply copying a checklist found on the internet will not suffice. You are to provide your checklist as a composite of the various readings, research, and examples you are able to find (make sure to provide references). 

  

Be prepared to present to the class your findings and at a minimum explore:  

  

1. What references went into your checklist?

  

2. Which areas do you feel would be the most difficult to quantify?

  

3. How long should this process take for an average acquisition?

  

4. How much will it cost?

  

5. Why do you think there are so many different varieties of due diligence checklists that are in use by various entities? Does this variety help or hurt accuracy? In other words, would a standard template across industries lead to a better process?