Accounting Due Diligence
Accounting Due Diligence That Protects Your Deal
Most M&A deals that slow down, reprice, or fall apart do so because of accounting and tax issues that were there all along. Finding these issues early and getting ahead of them is key to your deal’s success. KBF's Accounting Due Diligence team is built to find them first.
For years, we have worked with buyers, sellers, and investors to provide an independent review of the tax and accounting landscape before a deal closes. If you are acquiring a business, preparing for a sale, or evaluating an investment, our team gives you a clear read on what is there and what it means for the deal.
Ready to protect your next transaction?
Why Choose KBF for Due Diligence
Your engagement is led by experienced professionals who stay involved from scoping through final delivery. The work does not get handed off to junior staff once the proposal is signed.
When a deal includes multi-state exposure, complex compensation arrangements, or SEC reporting implications, KBF's SALT, International Tax, Global Mobility, and SEC Readiness teams are at the table from the start.
Your engagement is led by experienced professionals who stay involved from scoping through final delivery. The work does not get handed off to junior staff once the proposal is signed.
KBF has worked on hundreds of transactions for public companies, private equity-backed businesses, and venture-backed growth companies.
How We Deliver
Buy-Side Due Diligence: Know Exactly What You Are Acquiring
When acquiring a business, the financial statements will only tell part of the story. The tax and accounting profile tells the rest. Issues like unreported liabilities, nexus gaps, and worker classification problems rarely surface until after signing. This information can reshape the economics of a deal. KBF works alongside your team to make sure you know exactly what you are buying before you commit to a price.
Our buy-side due diligence work typically covers:
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- A federal, state, and local tax compliance review. This confirms that filings are up-to-date and correct, identifying open audit exposures, nexus gaps, and tax positions that may not hold up under scrutiny.
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- An accounting policy and financial reporting assessment. This evaluates quality of earnings, revenue recognition practices, accounting policies, adequacy of internal controls, and GAAP compliance.
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- A transaction structuring analysis. This advises on tax-efficient deal structure (asset vs. stock) and makes sure that purchase agreement provisions protect your position.
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- A SALT, payroll, and indirect tax review. This identifies multi-state nexus exposure, sales and use tax liabilities, worker classification issues, and other non-income-tax obligations sellers commonly overlook.
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- Post-close tax planning. This identifies elections and structuring strategies that preserve value once the deal is done.
Sell-Side Due Diligence: Enter the Market from a Position of Strength
Most sellers go to market and wait for a buyer to find the problems. That is a difficult position to negotiate from. When a buyer's team finds a tax or accounting issue during diligence, the conversation shifts in their favor. Price adjustments, holdbacks, and additional reps and warranties almost always follow. Sellers who work through their own diligence first can address issues before they become leverage and walk into the process knowing exactly where they stand.
KBF's sell-side due diligence follows the same process that a sophisticated buyer's advisor would use. We examine your business from the outside in with the explicit goal of identifying what the buyer would identify.
Our sell-side work typically includes:
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- A federal, state, and local tax compliance review. This confirms that filings are up-to-date and correct, identifying open audit exposures, nexus gaps, and tax positions that may not hold up under scrutiny.
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- An accounting policy and financial reporting assessment. This evaluates quality of earnings, revenue recognition practices, accounting policies, adequacy of internal controls, and GAAP compliance.
-
- A transaction structuring analysis. This advises on tax-efficient deal structure (asset vs. stock) and makes sure that purchase agreement provisions protect your position.
-
- A SALT, payroll, and indirect tax review. This identifies multi-state nexus exposure, sales and use tax liabilities, worker classification issues, and other non-income-tax obligations sellers commonly overlook.
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- Post-close tax planning. This identifies elections and structuring strategies that preserve value once the deal is done.
Frequently Asked Questions
Schedule a Consultation
If you are planning a transaction, whether you are on the buy side, the sell side, or representing an investor, it is worth a conversation before things get moving. KBF's Accounting Due Diligence team can walk you through what a review would cover and what to expect from the process.
Explore More Services From KBF Advisory
State & Local Tax (SALT)
Multi-state complexity affects most transactions. KBF's SALT team identifies nexus exposure and multi-state obligations before they become deal issues.
International Tax
For deals with cross-border components, KBF's International Tax team addresses treaty positions, transfer pricing, and global tax structure.
IPO & SEC Readiness
When going public introduces a new level of financial scrutiny, KBF's SEC Readiness team helps you prepare for what comes next.
Transfer Pricing
Intercompany transactions in multinational deal structures require defensible pricing documentation. KBF's Transfer Pricing practice provides economic analysis and planning.
Advisory Services
See the full range of KBF's advisory capabilities, from technical accounting consulting to IPO readiness and business restructuring.
Accounting & Reporting
Complex transactions require specialized accounting treatment. KBF's advisory team supports financial reporting through M&A and other significant business events.