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    Internal Controls Due Diligence  (Page 12 of 14)


    The following pages contain a detailed due diligence checklist that has been compiled from many years of M&A projects.

     

    While this is one of the most extensive and comprehensive due diligence checklists available for free on the internet, you should consult your lawyer and investment banker as they will likely have a few additional suggestions.

    XII. INTERNAL CONTROLS and INFORMATION SYSTEMS

    1. Generally describe the information systems used by the Company and how they compare with industry standards and the Company’s direct competition.
       
    2. Complete List of all Hardware and Software used to manage the business
      Quantify the dollar investment made by the Company over the past three years with regard to its technology.
       
    3. Describe the Company’s accounting and financial controls and MIS functions.
      What MIS and technology expenditures will be needed in the future?
       
    4. Generally describe the IT physical security as well as Internet IT security.
       
    5. Determine how many security breaches the company has had as a result of hackers within the last 24 months and the extend of information lost or compromised.
       
    6. Identify What remote locations have secured or non-secured internet access to servers which contain corporate information.
       
    7. Identify which employees have “administrative” or “super-user” access to critical company files and databases. How many of those employees were terminated within the last 24 months.
       
    8. What is the backup procedure to secure critical business electronic records and databases.
       
    9. Are any records secured in an offsite or third party location?
       
    10. Does the company have a disaster recovery plan?

     



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