There are different types of due diligence audit, depending on the scope and purpose of the transaction. Some of the most common types are:
• Financial due diligence: This involves reviewing the target company's financial statements, working capital, cash flow, assets, liabilities, and tax compliance. It aims to verify the accuracy and reliability of the financial information provided by the target company.
• Legal due diligence: This involves reviewing the target company's contracts, agreements, licenses, permits, litigation, intellectual property rights, and regulatory compliance. It aims to identify any legal risks or issues that may affect the transaction or the future operations of the target company.
• Operational due diligence: This involves reviewing the target company's business processes, systems, policies, procedures, human resources, customers, suppliers, and competitors. It aims to assess the efficiency and effectiveness of the target company's operations and its competitive position in the market.