| Detail | For this role |
|---|---|
| Department | CA and Consulting |
| Level | Mid level |
| Reports to | Transaction Advisory Manager |
| Direct reports | None |
| Experience | 2 to 5 years in transaction advisory, audit or corporate finance |
Due Diligence Analyst job description template
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Job title: Due Diligence Analyst
Department: CA and Consulting
Reports to: Transaction Advisory Manager
Location: [City], [office, branch or site]
About the role
A Due Diligence Analyst investigates a target company on behalf of an investor or acquirer. They dig into the financials, taxes, contracts and compliance in a data room, test the quality of the reported earnings, and surface the risks that could change the price or kill the deal. The role sits in the transaction advisory team and works to tight deal timelines. A good Due Diligence Analyst finds the issue that others miss, presents it plainly with the numbers behind it, and gives the client a clear view of what they are really buying.
Key responsibilities
- Analyse the target's historical financials to test the quality and sustainability of reported earnings and cash flows.
- Normalise earnings for one off, non recurring and related party items to arrive at a clean run rate.
- Review the data room for financial, tax, statutory and contractual documents, and track what is missing.
- Test working capital trends and build a view of the normal working capital needed to run the business.
- Identify off balance sheet items, contingent liabilities, and tax and compliance exposures in the target.
- Reconcile the target's management accounts to the audited financials and explain the differences.
- Prepare the due diligence findings with clear issues, the numbers behind them, and the impact on the deal.
- Raise focused questions to the target's management and follow up until the answers are clear.
- Support the deal team on how findings should affect price, warranties or the sale agreement.
- Keep the analysis and evidence organised so findings can be defended after the deal.
Requirements
- Chartered Accountant, CFA, or an MBA in finance
- Strong grasp of financial statements and accounting
- A valuation or transaction certification is an advantage
- 2 to 5 years in transaction advisory, audit or corporate finance
KRAs and KPIs for a Due Diligence Analyst
Key result areas for the appraisal form, each with a KPI you can measure every month or quarter.
| Key result area | How to measure it |
|---|---|
| Earnings quality | Normalised earnings and one off adjustments identified and supported with evidence |
| Issue detection | Material financial, tax and working capital risks surfaced before deal sign off |
| Timeline delivery | Due diligence sections delivered within the deal timeline every time |
| Analysis accuracy | Findings reconcile to source data with no errors found on review |
| Working capital | A defensible normal working capital estimate delivered for each deal |
| Client usefulness | Findings written clearly enough to inform price and negotiation directly |
Skills and tools
Tools used day to day: MS Excel, Financial modelling tools, Data room platforms, Company and MCA databases, MS PowerPoint.
Reporting line and career path
Next roles: Transaction Advisory Manager, Valuation Manager, Corporate Development Lead
Interview questions for a Due Diligence Analyst
- How do you test whether a target's reported profit is really sustainable?
- What adjustments would you make to normalise earnings, and why?
- How do you arrive at a normal working capital figure for a deal?
- You spot a large related party sale in the target's revenue. How do you treat it?
- The data room is missing key tax documents days before sign off. What do you do?
- Tell me about a finding you surfaced that changed a deal's price or terms.
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What does a due diligence analyst do?
A due diligence analyst investigates a company that an investor or buyer wants to acquire. They analyse its financials, taxes, contracts and compliance, test whether the reported earnings are real and sustainable, estimate normal working capital and surface the risks that could change the price. Their findings help the client decide whether and how to do the deal.
What is the difference between due diligence and audit?
An audit gives an opinion on whether financial statements are fairly stated for a past period. Due diligence looks forward for a buyer: it tests the quality of earnings, working capital, hidden liabilities and deal risks to inform a purchase decision. Audit follows a fixed framework; due diligence is shaped by what matters to the specific deal.
What qualifications do you need for due diligence?
Most due diligence analysts are chartered accountants, CFA charterholders or MBAs in finance, with two to five years in transaction advisory, audit or corporate finance. Firms want a strong grasp of financial statements, sharp analysis, a sceptical eye and the ability to write findings clearly enough to drive a negotiation.