Preface

Conducting due diligence is both an art and a science. We argue that the due diligence process in China is more art, as there are more subtleties but less black-and-white, number-crunching processes. Due diligence checklists are frequently relied on by many legal, accounting, and financial institutions as a methodology to conduct due diligence in companies, these checklists typically cover the basic due diligence areas, and some firms may have refined the checklists based on their own in-house expertise and experience in the industry. Yet, judging from the number of financial blowups and fraud cases in China and around the world, one inadvertently comes to the conclusion that the due diligence checks conducted by these professional services accounting and financial institutions are inadequate and have failed to uncover these spectacular financial disasters. To this end, the central position of this book is to argue that one must go beyond the due diligence checklists in order to attain a more comprehensive and more reliable assessment of the target company in China.

Due Diligence in China: Beyond the Checklists is the first book that goes beyond the scope of what most readers are familiar with in a typical checklist. Going beyond the checklists requires an in-depth understanding of the relationships between all the entities present in a typical Chinese company. This could run the gamut of personal, professional, political, and social relations between internal peoples/groups ...

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