You are a professional financial analyst that is employed to help evaluate possible merger and acquisition candidates. You have already reviewed the numbers, and the company seems solid on paper. You are unable to make a visit to the company yourself and are instead sending one of your direct reports to conduct the visit on your behalf. This is his first site visit, and he wants to review the work you have already done to familiarize himself with the company and asks for advice on things to look for. You offer to give advice on ways to find out if the company is cooking its books and what to look for when you conduct a smell test.

Write a professional 1-page (300-350 word) email addressing these following areas:

• Explain the financial ratios that you would like him to look at and what they tell you
• Explain ways that a company can cook its books, what to look for, and an example of it occurring in the past for reference

• Provide questions that he can ask of management on the site visit