10 key due diligence checks for organisations heading overseas

Brexit, sales growth, climate change and a host of other reasons may lead your board to decide to set up operations in new territories. Many chief audit executives will go through their careers having never to think about this. But for those who do, it can be daunting as internal audit is one of many specialisms that has a role within the project and due diligence process.

It is useful for CAEs to think about this topic, not least as many of the points are also relevant for managing risk in existing facilities. It is, likewise, a missed opportunity to simply add any new facility or operation to the audit plan once it is up and running.    

In the following piece, we highlight 10 key due diligence checks for organisations heading overseas. In particular, we focus on setting up an overseas operation with a local branch staffed by one or more employees or a fully registered local subsidiary. Other options can include a joint venture partnership or simply trading at distance from the UK.

What are the 10 considerations?

Many of the risk considerations require specialist skills outside the remit of internal audit. The role of a CAE is to provide assurance that a comprehensive due diligence process is being undertaken by reviewing outputs, asking questions and challenging assumptions. This may be as an advisor on a project team or through more formal assurance depending on the requirements of the audit committee.

1. Strategy

The first question for any CAE to think about is an introspective one to help you decide how best to manage your relationship with key stakeholders.

Ask yourself whether your organisation has the capability to succeed overseas and/or whether it is ready to take on the challenge. How does the board handle planned change and…