Common Questions and Answers on Due Diligence

The ability to perform due diligence effectively is a key aspect of the M&A process. Knowing the most frequently asked due diligence-related questions and their answers can help you evaluate possible risks and make an informed decision.

What are your methods for resolving discrepancies during the due diligence process?

The interviewer wants to know what you would do in the situation in which there is a discrepancy between internal and public documents. They want to know your ability to spot the issue, conduct the required research, and take action to address it. This test also tests your attention to detail and your ability to work under pressure deadlines.

How can you determine the quality of a company’s financial data?

The purpose of the buy-side is to determine whether the company being considered for purchase can generate enough revenue to pay off its debts and other obligations. This is done by analysing the cash flows of a company and comparing them with those of its competition. It is important to know the current assets and liabilities.

What steps do you take to protect confidential information while conducting a due diligence?

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