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Operational Review, Due Diligence Or Enterprise Risk Management Starter System

By 28 marca 2020No Comments

Sometimes the hardest part of compliance, enterprise risk management (ERM) review or assessment, or due diligence is just getting started. Since the first thing needed to get started on any of these processes is information, data and a prioritized list, consider the example below as an example of priority items and format to start with.

In connection with our schedule meeting in Company X, hereinafter referred to as the Company, please forward the items listed below to ___, so that we may prepare for your meeting. All information will be held in complete confidence.

1. Audit reports and Annual Financial Statements (Profit and Loss, Balance Sheet, Cash Flow) for the past 5 years.

2. Most recent monthly financial statement and access to the closing package supporting details

3. Management letters, if any, which have been prepared by auditors for the last 3 years.

4. A detailed, line item-by line item break-down of the income statement and balance sheet for the last 12 months, preferable in comparison to the latest twelve month operating plan.

5. Annual and longer term (5 years plan, if available) Financial operating plans. Include all assumptions and footnotes. And a copy of prior operating plans for the last 2 years.

6. Sales and Marketing collateral for your major product lines.

7. A list of the ten most profitable customers indicating dollar volume and a complete list of all customers with annual volume indicated.

8. Copies of any agreements or contracts which govern the relationship with customers.

9. Most recent Board of Directors package with full supporting details created for follow-up discussions.

10. An organization chart showing all reporting relationships.

11. A description and copies of any outstanding order, injunction, decree, or judgment of any court or any other administrative or regulatory body or any arbitration tribunal binding upon the Company or any of its property, greater than $10,000.

12. Any other documents or information which, in your judgment, is significant to the Company or its business.

This information above will give you enough information to scope the project, while keeping the request level low enough that you do not overwhelm the people you will be working with. Depending on what you see, you can then ask for a larger and more tailored list for additional information as appropriate for your due diligence review, enterprise risk management (ERM) assessment, etc.

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