Due diligence audit is a comprehensive review of a company’s financial, legal, and operational position, done before you commit to a transaction rather than after you discover what you missed.
Due diligence covers more ground than just the numbers. Financial due diligence looks at historical financials, working capital trends, and quality of earnings, essentially whether the profit being shown is real, recurring profit or something propped up by one-off adjustments. We go deeper into this specific angle on our Financial Due Diligence page if that’s the piece you need most. Legal due diligence checks title to assets, pending litigation, material contracts, licenses, and whether the business is actually free of the encumbrances it claims to be free of. Tax due diligence traces past liabilities, contingent exposures, and whether GST and TDS positions are clean enough that they don’t become your problem the day after closing. Commercial and operational due diligence rounds it out: customer concentration, key-person dependency, and whether the business actually runs the way the pitch deck says it does.
Most engagements come from one of a few situations: an acquisition or merger, a fresh investment round, a lender deciding whether to sanction a large loan, a joint venture being structured, or a business preparing for disinvestment or a stock offer. The common thread is money about to change hands, or control about to shift, based on numbers and representations nobody outside the target company has independently checked yet.
A few checks are specific to doing this in India, and missing them costs more than the due diligence itself would have. If the deal is large enough, above roughly ₹2,000 crore in value where the target has substantial business operations in India, it needs CCI notification before it closes, regardless of how the target’s own turnover or assets look on paper. This deal value test was added specifically to catch large tech and digital acquisitions that traditional asset and turnover thresholds used to miss. For listed targets, SEBI’s takeover regulations kick in once an acquirer crosses 25% of voting rights, triggering a mandatory open offer to public shareholders. Cross-border deals bring FEMA into the picture too: sectoral caps, pricing guidelines, and reporting through Form FC-GPR or FC-TRS. And where the transaction is structured as a formal merger or amalgamation rather than a share purchase, Sections 230 to 240 of the Companies Act route the whole thing through NCLT approval.
For time-sensitive deals, we start with a red flag report: a fast read on whether there’s anything in the target that should stop the deal before you spend real time and money on full-scope diligence. From there, the complete due diligence report brings together financial, legal, tax, and operational findings into one risk map, prioritised by what actually threatens the deal versus what’s just worth knowing. Where earnings quality is the central question, a dedicated quality of earnings analysis breaks down exactly which parts of reported profit are sustainable and which parts won’t repeat next year.
Due diligence is only useful if it actually changes how a deal gets priced or structured, not just a box-ticking report filed away after signing. We flag what should genuinely change your view of the deal, valuation adjustments, indemnity clauses, walk-away conditions, rather than burying real risk in a hundred pages of boilerplate observations.
Our Strength Lies in Providing Real-World Practical Solutions
We plan every statutory audit around your AGM and ROC deadlines, so Form AOC-4 and MGT-7 are always filed on time. Our team works to a clear schedule and keeps you updated at each stage, so you never miss a statutory due date.
You get a thorough, Standards-compliant audit at transparent, competitive fees with no surprises. Because we deliver statutory audit, tax audit and ROC filing together, you save on duplicated effort and overall cost.
Our experienced team of Chartered Accountants, Company Secretaries and consultants handles the full compliance chain under one roof — statutory audit, tax audit, GST audit, internal financial controls and annual ROC filings — so everything stays coordinated and consistent.
AVS & Associates is a peer-reviewed CA firm founded by CA Vishnu Agrawal, with 25+ years of experience and five partners. We maintain the highest ethical and professional standards on every engagement, with complete client confidentiality.