{"id":4617,"date":"2025-06-06T18:00:11","date_gmt":"2025-06-06T16:00:11","guid":{"rendered":"https:\/\/maraz.es\/?p=4617"},"modified":"2026-10-12T13:18:44","modified_gmt":"2026-10-12T11:18:44","slug":"financial-due-diligence-vs-financial-audit","status":"publish","type":"post","link":"https:\/\/maraz.es\/en\/financial-due-diligence-vs-financial-audit\/","title":{"rendered":"Financial Due Diligence vs. Financial Audit: Key Differences"},"content":{"rendered":"<p>In corporate transactions such as company sales and acquisitions, capital increases, IPOs or investment processes, <strong>there are two financial analysis mechanisms which, although they share certain common elements, respond to different objectives, scopes and regulations:<\/strong> <strong>the financial audit and financial due diligence.<\/strong> Understanding their differences is essential for executives, investors and advisers involved in such transactions.<\/p>\n<p>And it is not a merely academic distinction. <strong>A business owner who believes that, because their accounts have been audited &#8220;without qualifications&#8221;, they no longer need a <a href=\"https:\/\/maraz.es\/en\/financial-due-diligence\/\">due diligence<\/a> when selling the company is starting from a mistaken premise that can cost them money at the negotiating table. And a buyer who takes audited accounts as a substitute for a transactional review may end up overpaying for an inflated EBITDA or assuming unprovisioned contingencies<\/strong>. In this article we explain in depth what each process is, how they differ and why they are complementary rather than substitutes.<\/p>\n<h2><strong>What is a financial audit?<\/strong><\/h2>\n<p><strong>A financial audit is an external, regulated and recurring process designed to verify that a company&#8217;s financial statements present, fairly and in accordance with the applicable accounting framework<\/strong> (IFRS, Spanish GAAP, etc.),<strong> its financial position, performance and results<\/strong>. Its main purpose is to validate the reliability of published financial information, ensuring transparency towards interested third parties: shareholders, lenders, regulators or markets.<\/p>\n<p>The nuance is worth spelling out, because it matters: the auditor verifies that the accounts give a <strong>true and fair view<\/strong> of the company&#8217;s assets, financial position and results in accordance with the accounting framework. But the auditor <strong>does not certify that the company is solvent, that it is a good investment, nor does it value the business<\/strong>: it issues a technical, independent opinion on the reliability of the accounting information. The audit serves a public-interest function: it protects the third parties who deal with the entity (shareholders, banks, suppliers, the tax authorities, investors).<\/p>\n<h3><strong>Main characteristics:<\/strong><\/h3>\n<ul>\n<li>It is governed by auditing standards (NIA-ES in Spain) and must be carried out by auditors registered with the ROAC (Spanish Official Register of Auditors).<\/li>\n<li>It is performed annually and focuses on closed financial years, with a retrospective approach.<\/li>\n<li>It is confined to the accounting framework, without adjustments for business criteria or specific valuations.<\/li>\n<li>It concludes with a standardised technical opinion (unqualified, qualified, adverse or disclaimer).<\/li>\n<\/ul>\n<h3>The regulatory framework for auditing in Spain<\/h3>\n<p>Anyone wishing to understand auditing should know its regulatory pillars, all of them verifiable:<\/p>\n<ul>\n<li><strong>Law 22\/2015, of 20 July, on Auditing of Accounts (LAC): <\/strong>the core statute. It transposes Directive 2014\/56\/EU and is complemented by Regulation (EU) 537\/2014 for public-interest entities. Its implementing regulation was approved by Royal Decree 2\/2021.<\/li>\n<li><strong>Adapted International Standards on Auditing (NIA-ES): <\/strong>they set out how each engagement is performed (procedures, evidence, documentation and the formulation of the opinion).<\/li>\n<li><strong>ICAC (Spanish Accounting and Auditing Institute): <\/strong>the public body that exercises supervision, issues the Spanish GAAP and the NIA-ES and has sanctioning powers.<\/li>\n<li><strong>ROAC (Official Register of Auditors): <\/strong>registration is a necessary condition for practising statutory audit in Spain.<\/li>\n<\/ul>\n<h3>Who is required to be audited?<\/h3>\n<p>Under article 263 of the Spanish Companies Act (LSC), a company is required to have its accounts audited when, for two consecutive financial years, it meets at least two of these three criteria (thresholds in force at the time of writing):<\/p>\n<table style=\"height: 239px;\" width=\"820\">\n<tbody>\n<tr>\n<td width=\"293\">\n<p style=\"text-align: center;\"><strong>Parameter<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"280\"><strong>Current threshold<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\" width=\"293\">Total assets<\/td>\n<td width=\"280\">\n<p style=\"text-align: center;\">\u20ac2,850,000<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"293\">\n<p style=\"text-align: center;\">Net annual turnover<\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"280\">\u20ac5,700,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\" width=\"293\">Average number of employees<\/td>\n<td width=\"280\">\n<p style=\"text-align: center;\">50<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>There are also cases of mandatory audit regardless of size: listed companies, companies receiving public subsidies in excess of \u20ac600,000, those contracting with the public sector above certain limits, or entities subject to sector-specific regulation (banking, insurance).<\/p>\n<h3>The types of audit opinion<\/h3>\n<p>The opinion is the essential element of the report (NIA-ES 700 and 705). A distinction is drawn between an unmodified (unqualified) opinion and a modified opinion:<\/p>\n<ol>\n<li><strong>Unqualified (unmodified or &#8220;clean&#8221;): <\/strong>the accounts give a true and fair view in all material respects.<\/li>\n<li><strong>Qualified: <\/strong>there is a material but not pervasive problem (a limited misstatement or a scope limitation).<\/li>\n<li><strong>Adverse: <\/strong>the misstatements are material and pervasive; the accounts do not give a true and fair view.<\/li>\n<li><strong>Disclaimer of opinion: <\/strong>the auditor cannot obtain sufficient evidence to form an opinion.<\/li>\n<\/ol>\n<h3>Materiality and the &#8220;expectation gap&#8221;: what an audit does NOT do<\/h3>\n<p><strong>An audit is governed by the concept of materiality<\/strong> (NIA-ES 320): the auditor <strong>does not review each and every transaction<\/strong> of the company \u2014 that would be unfeasible \u2014 but designs its work to detect material misstatements above a threshold calculated on magnitudes such as profit, turnover or total assets.<\/p>\n<p><strong>Hence the well-known &#8220;expectation gap&#8221; between what the public believes an audit does and what it actually does:<\/strong><\/p>\n<ul>\n<li><strong>It does not guarantee the total absence of errors: <\/strong>it provides reasonable, not absolute, assurance.<\/li>\n<li><strong>It is not designed to detect all fraud: <\/strong>although NIA-ES 240 requires the risk of fraud to be considered, its purpose is not to uncover it (&#8220;the auditor is a watchdog, not a bloodhound&#8221;).<\/li>\n<li><strong>It does not value the business: <\/strong>it does not calculate a normalised EBITDA, analyse customer concentration or express a view on the price of a transaction.<\/li>\n<\/ul>\n<p>That is why the auditor&#8217;s civil liability (art. 26 LAC) extends both to the audited entity and to third parties who have taken decisions on the basis of the report; but its subject matter is the reliability of the accounts, not the merits of an investment. An audit is not designed to detect operational or contractual contingencies, nor to adjust the company&#8217;s profitability in the context of a sale.<\/p>\n<h3>Main uses of an audit<\/h3>\n<ul>\n<li><strong>Compliance with legal and regulatory obligations.<\/strong><\/li>\n<li><strong>Transparency towards third parties<\/strong> (shareholders, creditors, investors, etc.).<\/li>\n<li><strong>A basis for comparison<\/strong> for internal analysis and consolidations.<\/li>\n<\/ul>\n<h2>What is financial due diligence?<\/h2>\n<p><strong>Financial due diligence is an exhaustive, flexible, risk-oriented analysis carried out in the context of a corporate transaction (M&amp;A, LBO, entry of investors, etc.) with the aim of validating the economic and financial assumptions underpinning the valuation and structuring of the deal.<\/strong> While the audit validates the formal accuracy of the accounts, due diligence seeks to understand the economic reality of the business: its capacity to generate cash, the sustainability of its earnings and its hidden risks. It is a central piece of any <a href=\"https:\/\/maraz.es\/en\/mergers-acquisitions\/\">company sale and M&amp;A<\/a> process.<\/p>\n<h3>Main characteristics<\/h3>\n<ul>\n<li>Its scope is flexible and adapts to the buyer&#8217;s priorities, focusing on magnitudes such as normalised EBITDA, net debt, CAPEX or material contingencies.<\/li>\n<li>It has a forward-looking approach and makes it possible to analyse information by customer, product, channel or region.<\/li>\n<li>It identifies hidden risks and calculates relevant adjustments that directly affect the price or terms of the deal.<\/li>\n<li>It includes a review of tax, employment and contractual matters and of contingencies linked to the change of control.<\/li>\n<li>The resulting report does not merely describe: it sets out specific recommendations for the negotiation.<\/li>\n<\/ul>\n<h3>Quality of Earnings: the heart of due diligence<\/h3>\n<p><strong>Quality of Earnings (QoE) analysis is the core of modern due diligence.<\/strong> Its aim is to determine how much of reported profit is real, recurring and sustainable \u2014 that is, what part of EBITDA will continue to be generated after the transaction. This matters enormously because in M&amp;A the price is usually set by applying an <a href=\"https:\/\/maraz.es\/en\/ebitda-multiples-vs-dcf-choosing-valuation-method\/\">EBITDA multiple<\/a>: if the multiple is 7\u00d7, every euro of EBITDA adjusted up or down translates into \u20ac7 of value. QoE scrutinises the drivers of EBITDA and cash: revenue recurrence, customer concentration, margin sustainability, revenue recognition policy and the conversion of profit into cash.<\/p>\n<h3>Normalised EBITDA and the &#8220;bridge&#8221;<\/h3>\n<p><strong>Normalised EBITDA starts from reported EBITDA and corrects it to remove items that do not reflect the recurring capacity of the business.<\/strong> Typical adjustments (add-backs) include: non-recurring items (one-offs, such as a severance payment or a sale of assets); owner expenses (above-market salary, personal expenses) that the buyer will not assume; and related-party transactions at non-market prices, which are brought into line. The result is set out in a &#8220;bridge&#8221; that shows, in a traceable way, the path from reported to adjusted EBITDA. This bridge is one of the most heavily negotiated elements of the deal: the seller tends to maximise the add-backs and the buyer to challenge them, demanding that each adjustment be supportable, traceable and not duplicated.<\/p>\n<h3>Net debt and debt-like items<\/h3>\n<p><strong>After EBITDA, net financial debt is the most widely used price-adjustment parameter in Spain. The price is usually expressed on a cash-free, debt-free basis:<\/strong> the operating business is valued (Enterprise Value) and, to arrive at the price of the shares (Equity Value), net debt is deducted.<\/p>\n<p>We explain this difference between the value of the business and the value to the shareholder in detail in our article on <a href=\"https:\/\/maraz.es\/en\/enterprise-value-vs-equity-value-key-differences\/\">Enterprise Value vs Equity Value<\/a>. It is also critical to analyse debt-like items: items that are not financial debt for accounting purposes but are economically equivalent to it (overdue payables, deferred tax arrangements, provisions, deferred bonuses, pension deficits). Their definition is negotiated in the contract and is a well-known source of post-closing disputes.<\/p>\n<h3>Normalised working capital and the target level (peg)<\/h3>\n<p><strong>Working capital (inventories + receivables \u2212 payables \u2212 other operating creditors) has a greater impact on price than it might seem, because its variations generate cash inflows and outflows.<\/strong> In a transaction it is quantified on a monthly basis over several years to analyse its seasonality and set a normalised or target level (peg). At closing, the difference between actual working capital and that target level adjusts the price, protecting the buyer against &#8220;unnatural&#8221; manipulation (delaying payments to suppliers, bringing forward collections). It is therefore worth understanding properly <a href=\"https:\/\/maraz.es\/en\/what-is-working-capital-and-why-is-it-critical\/\">what working capital is and why it is so important<\/a>.<\/p>\n<h3>Analysis of the business plan and cash flows<\/h3>\n<p><strong>Contemporary due diligence does not look only at the past, but at the capacity to generate cash in the future:<\/strong> the conversion of EBITDA into cash, CAPEX requirements (maintenance vs growth) and the real dynamics of working capital. In investment and LBO transactions the business plan is also reviewed, stress-testing its assumptions: 15% growth is not the same if it comes from price, volume or new customers, and each assumption carries a different risk profile that must be reflected in the valuation.<\/p>\n<h3>Main uses of due diligence<\/h3>\n<ul>\n<li><strong>Validating the investment thesis and determining the price.<\/strong><\/li>\n<li><strong>Negotiating contractual warranties.<\/strong><\/li>\n<li><strong>Planning post-acquisition integration.<\/strong><\/li>\n<\/ul>\n<h2>Buyer (buy-side) vs Seller (Vendor Due Diligence)<\/h2>\n<p><strong>Due diligence may be commissioned by the buyer (buy-side), to uncover risks before buying and set the price, or by the seller itself before going to market: that is Vendor Due Diligence (VDD). VDD has notable advantages for the seller:<\/strong><\/p>\n<ul>\n<li><strong>It avoids price chipping: <\/strong>by resolving contingencies before the buyer discovers them, it removes arguments for lowering the price.<\/li>\n<li><strong>It maximises value: <\/strong>it presents the value levers (normalised EBITDA, quality of earnings, cash generation) in the most robust way.<\/li>\n<li><strong>It speeds up the competitive process: <\/strong>in auctions with several buyers, it reduces each one&#8217;s review time and allows negotiations to run in parallel.<\/li>\n<li><strong>It limits post-closing warranties: <\/strong>it reduces the scope of the representations and warranties that can be demanded and the need for retentions.<\/li>\n<\/ul>\n<p>That is why preparing the sale in advance \u2014 putting the house in order and, where appropriate, carrying out a VDD \u2014 is usually one of the investments with the best return in the whole process. It is part of what it means to <a href=\"https:\/\/maraz.es\/en\/mergers-acquisitions\/\">prepare a company properly for sale<\/a>.<\/p>\n<h2>From the report to the contract: price, SPA and warranties<\/h2>\n<p><strong>The value of a due diligence is not to issue a standardised opinion, but to translate the findings into implications for the transaction. Those findings have an impact on two levels:<\/strong><\/p>\n<p>On the <strong>price<\/strong>: adjustments to EBITDA, net debt or working capital directly modify the valuation. And on the <strong>sale and purchase agreement (SPA)<\/strong>: the risks detected are carried into the representations and warranties \u2014 the seller&#8217;s statements about the state of the company, the breach of which gives rise to compensation \u2014 and into specific indemnities. Due diligence and warranties are not alternatives: they complement each other. The more complete the due diligence, the better the SPA clauses are delimited. It is also advisable to anticipate these rules of the game between the parties in a good <a href=\"https:\/\/maraz.es\/en\/shareholders-agreement\/\">shareholders&#8217; agreement<\/a> when the transaction involves several shareholders coexisting.<\/p>\n<p>Price-adjustment mechanisms also depend on due diligence. Under the <strong>completion accounts<\/strong> model, a provisional price is set and adjusted after closing according to actual net debt and working capital. Under the <strong>locked box<\/strong> model, a fixed price is set on reference financial statements, with no subsequent adjustment, and the seller undertakes not to extract value (leakage) until closing; this model requires particularly meticulous due diligence on the reference accounts, precisely because there will be no adjustment. In distressed transactions, moreover, warranty and indemnity (W&amp;I) insurance becomes especially relevant in achieving a &#8220;clean exit&#8221;, as is often the case in the <a href=\"https:\/\/maraz.es\/en\/distressed-ma-how-to-sell-a-company-in-crisis\/\">sale of companies in crisis<\/a>.<\/p>\n<h2>Practical example<\/h2>\n<p>Before investing in a retail company, a fund analyses its audited financial statements, which guarantees their accounting reliability. However, it also commissions a financial due diligence to find out:<\/p>\n<ul>\n<li>Whether there is non-recurring income inflating EBITDA.<\/li>\n<li>Whether there is pending litigation that has not been provided for.<\/li>\n<li>How cash flows behave by store or channel.<\/li>\n<\/ul>\n<p><strong>The audit ensures formal accuracy. Due diligence reveals real economic value.<\/strong><\/p>\n<h2>Comparison table: audit vs financial due diligence<\/h2>\n<table style=\"height: 655px;\" width=\"1131\">\n<tbody>\n<tr>\n<td width=\"140\">\n<p style=\"text-align: center;\"><strong>Dimension<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"230\"><strong>Financial audit<\/strong><\/td>\n<td style=\"text-align: center;\" width=\"230\"><strong>Financial due diligence<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\" width=\"140\"><strong>Objective<\/strong><\/td>\n<td style=\"text-align: center;\" width=\"230\">Validate that the accounts give a true and fair view<\/td>\n<td width=\"230\">\n<p style=\"text-align: center;\">Inform an investment decision and the negotiation<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">\n<p style=\"text-align: center;\"><strong>Regulation<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"230\">Regulated: LAC, NIA-ES, ICAC<\/td>\n<td style=\"text-align: center;\" width=\"230\">Unregulated: bespoke, defined by the client<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\" width=\"140\"><strong>Mandatory?<\/strong><\/td>\n<td style=\"text-align: center;\" width=\"230\">Legal (thresholds under art. 263 LSC)<\/td>\n<td width=\"230\">\n<p style=\"text-align: center;\">Voluntary<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">\n<p style=\"text-align: center;\"><strong>Frequency<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"230\">Recurring, annual<\/td>\n<td style=\"text-align: center;\" width=\"230\">One-off, for a transaction<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\" width=\"140\"><strong>Time focus<\/strong><\/td>\n<td style=\"text-align: center;\" width=\"230\">Retrospective (closed financial year)<\/td>\n<td width=\"230\">\n<p style=\"text-align: center;\">Forward-looking (future value)<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">\n<p style=\"text-align: center;\"><strong>Addressee<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"230\">Public \/ third parties<\/td>\n<td style=\"text-align: center;\" width=\"230\">Confidential client (buyer, investor or seller)<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\" width=\"140\"><strong>Scope<\/strong><\/td>\n<td style=\"text-align: center;\" width=\"230\">Standardised by the NIA-ES<\/td>\n<td width=\"230\">\n<p style=\"text-align: center;\">Flexible and risk-oriented<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">\n<p style=\"text-align: center;\"><strong>Output<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"230\">Standardised opinion<\/td>\n<td style=\"text-align: center;\" width=\"230\">Report with findings and recommendations<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\" width=\"140\"><strong>Professional<\/strong><\/td>\n<td style=\"text-align: center;\" width=\"230\">Auditor registered with the ROAC<\/td>\n<td width=\"230\">\n<p style=\"text-align: center;\">Transaction services \/ corporate finance team<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">\n<p style=\"text-align: center;\"><strong>Liability<\/strong><\/p>\n<\/td>\n<td style=\"text-align: center;\" width=\"230\">Towards the entity and third parties (art. 26 LAC)<\/td>\n<td width=\"230\">\n<p style=\"text-align: center;\">Contractual, towards the client commissioning it<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h2>Why they are complementary, not substitutes<\/h2>\n<p><strong>The question every business owner asks is: &#8220;if my accounts are audited and unqualified, why do I need a due diligence?&#8221;.<\/strong> The answer is that a clean audit does not replace a due diligence, because they answer different questions. A company can have an unqualified opinion and still present risks that only surface in a due diligence:<\/p>\n<ul>\n<li><strong>EBITDA inflated by non-recurring income: <\/strong>the audit confirms it is properly accounted for; the due diligence removes it from normalised EBITDA.<\/li>\n<li><strong>Contingencies below materiality: <\/strong>items the audit does not review in detail can be very significant once multiplied.<\/li>\n<li><strong>Customer dependence: <\/strong>high concentration (usually monitored when one customer exceeds 20% of revenue) is a critical risk that does not appear in the audit opinion.<\/li>\n<li><strong>Seasonal or &#8220;window-dressed&#8221; working capital: <\/strong>the audit verifies balances at a date; the due diligence analyses the monthly dynamics.<\/li>\n<\/ul>\n<p>In simple terms: <strong>the audit looks at whether the accounts have been done properly; the due diligence looks at whether the purchase is a good decision.<\/strong> And when the transaction takes place in a context of difficulties, the analysis overlaps with that of a <a href=\"https:\/\/maraz.es\/en\/restructuring-financing\/\">debt restructuring or refinancing<\/a>.<\/p>\n<h2>Other types of due diligence<\/h2>\n<p>Financial due diligence does not operate alone: it forms part of a set of reviews that give a 360\u00ba view of the target company. Depending on the transaction, legal (corporate, contractual, litigation), tax (tax contingencies), employment (contracts, collective agreements, Social Security), commercial or market (competitive position, customer portfolio), technical\/operational, environmental and compliance due diligence are usually carried out as well. In the middle market, financial due diligence is the backbone of the process, because it feeds the valuation and the price; but its conclusions are integrated with those of the others.<\/p>\n<h2>Market context: M&amp;A and due diligence in Spain<\/h2>\n<p>The Spanish M&amp;A market is at a mature stage. According to TTR Data&#8217;s Iberian Market Annual Report 2025, 3,336 transactions were recorded in Spain in 2025 (8% fewer than in 2024) for an aggregate value of \u20ac103,085 million (19.4% more): fewer deals, but larger and more selective.<\/p>\n<p>In the middle market, the firm Blue Mountain estimates 742 completed transactions in 2025, a record high for the segment. This more competitive environment has raised the importance of due diligence and of contractual protection instruments such as warranty and indemnity (W&amp;I) insurance, whose use, according to Cuatrecasas, has risen from around 33% to almost 40% of transactions.<\/p>\n<h2>Conclusion<\/h2>\n<p><strong>A financial audit provides a formal, external validation of a company&#8217;s accounting past, with regulatory, informational, reputational and comparative uses. Financial due diligence, by contrast, is a tool of critical analysis, geared to decision-making in corporate transactions, focused on detecting risks, validating assumptions and estimating with precision the economic value of the company in the context of the deal.<\/strong><\/p>\n<p><strong>Both processes are complementary.<\/strong> Knowing their differences is essential to structuring transactions rigorously and anticipating risks that do not appear in the financial statements but can have a decisive impact on the success of the deal. For the middle-market business owner the lesson is twofold: a clean audit is valuable, but it does not exempt them from carrying out (or demanding) a due diligence when there is a transaction; and early preparation is the investment with the best return in a sale.<\/p>\n<p>At <a href=\"https:\/\/maraz.es\/en\/financial-due-diligence\/\">Maraz Corporate Finance<\/a> we support middle-market companies, investors and advisers throughout the transaction cycle: buy-side <a href=\"https:\/\/maraz.es\/en\/financial-due-diligence\/\">due diligence<\/a>, Vendor Due Diligence (sell-side) and review of the sale and purchase agreement from a financial perspective, with rigour, independence and the utmost confidentiality. If you are considering buying, selling or raising investment, <a href=\"https:\/\/maraz.es\/en\/contact\/\">contact us<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/www.linkedin.com\/in\/javierderojas\/\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #333399;\"><strong>Javier de Rojas Roca de Togores<\/strong><\/span><\/a><\/p>\n<p><span style=\"color: #333399;\"><strong>Partner &#8211; Maraz Corporate Finance<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<h2>Frequently asked questions about due diligence and audit<\/h2>\n<h3>If my accounts are audited, do I still need a due diligence to sell?<\/h3>\n<p>Yes. The audit confirms that your accounts give a true and fair view, but it does not normalise EBITDA, analyse customer concentration or value the business. A buyer will still demand a <a href=\"https:\/\/maraz.es\/en\/financial-due-diligence\/\">due diligence<\/a>. Getting ahead with a Vendor Due Diligence lets you come to the negotiation with your homework done and protect the price.<\/p>\n<h3>What is normalised EBITDA and why is it so important in a sale?<\/h3>\n<p>It is reported EBITDA corrected for non-recurring items, owner expenses and related-party transactions, to reflect the recurring earnings capacity of the business. It matters because the price is set with an <a href=\"https:\/\/maraz.es\/en\/ebitda-multiples-vs-dcf-choosing-valuation-method\/\">EBITDA multiple<\/a>: every euro of adjustment is multiplied by the multiple. It is one of the most negotiated points of the whole deal.<\/p>\n<h3>What is the difference between net debt and working capital in the price adjustment?<\/h3>\n<p>Net debt (financial debt less cash) and debt-like items are deducted from enterprise value to arrive at the price of the shares (the bridge between <a href=\"https:\/\/maraz.es\/en\/enterprise-value-vs-equity-value-key-differences\/\">Enterprise Value and Equity Value<\/a>). <a href=\"https:\/\/maraz.es\/en\/what-is-working-capital-and-why-is-it-critical\/\">Working capital<\/a> is compared with a target level (peg) and its deviation also adjusts the price. They are two different mechanisms and both are quantified in the due diligence.<\/p>\n<h3>Who does what: the auditor or the financial adviser?<\/h3>\n<p>The audit can only be performed by an auditor registered with the ROAC, in accordance with the NIA-ES standards. The <a href=\"https:\/\/maraz.es\/en\/financial-due-diligence\/\">due diligence<\/a> is performed by a transaction services or corporate finance team, with no prescribed format, tailored to the deal. They are different profiles and engagements, even though both handle financial information.<\/p>\n<h3>What is a Vendor Due Diligence and when is it advisable?<\/h3>\n<p>It is the due diligence commissioned by the seller itself before going to market. It is advisable when you want to maximise the price and speed up a competitive process: it resolves contingencies before the buyer discovers them, avoids price reductions and limits post-closing warranties. It is part of <a href=\"https:\/\/maraz.es\/en\/mergers-acquisitions\/\">preparing the sale of the company properly<\/a>, ideally several months in advance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In corporate transactions such as company sales and acquisitions, capital increases, IPOs or investment processes, there are two financial analysis mechanisms which, although they share certain common elements, respond to different objectives, scopes and regulations: the financial audit and financial due diligence. Understanding their differences is essential for executives, investors and advisers involved in such [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":6746,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[333],"tags":[],"class_list":["post-4617","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-due-diligence"],"acf":{"team_member_autor":{"ID":1417,"post_author":"3","post_date":"2025-03-17 16:11:58","post_date_gmt":"2025-03-17 15:11:58","post_content":"","post_title":"Javier de Rojas Roca de Togores","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"javier-de-rojas-roca-de-togores","to_ping":"","pinged":"","post_modified":"2026-10-07 13:24:42","post_modified_gmt":"2026-10-07 11:24:42","post_content_filtered":"","post_parent":0,"guid":"https:\/\/maraz.es\/?post_type=team_member&#038;p=1417","menu_order":0,"post_type":"team_member","post_mime_type":"","comment_count":"0","filter":"raw"}},"_links":{"self":[{"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/posts\/4617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/comments?post=4617"}],"version-history":[{"count":0,"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/posts\/4617\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/media\/6746"}],"wp:attachment":[{"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/media?parent=4617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/categories?post=4617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maraz.es\/en\/wp-json\/wp\/v2\/tags?post=4617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}