Issues uncovered in diligence that changed your view of the deal?

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April 28, 2026

by an member from Case Western Reserve University in Cleveland, OH, USA

During QoE and diligence, what was one issue you uncovered that materially changed your view of the deal (positive or negative)? How early could you have identified it?
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Reply by a professional-legal
from University of Wisconsin in Minneapolis, MN, USA
Thanks @redacted‌! I'll let the experts comment on QofEs (although deals I've been on with QofEs, it's any number of things from aggressive revenue recognition to unrecorded liabilities to owner discretionary spending). On the legal side, it's all over but things like customer contracts that have change in control provisions, "hand-shake" contracts, issues with IP ownership, undisclosed lawsuits or investigations, and misclassified employees are not uncommon items that cause deals to slow down / be renegotiated / fall apart.
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Reply by a professional-accounting
from University of Florida in Miami, FL, USA
For smaller businesses, COGS recognition, Undeposited Funds, and AR. If these aren't clean chances are that the books as a whole arent either. I plug in Claude & Gemini into the raw QBO file to scan the whole GL and find flags in these areas.
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