It also provides guidance on assessing disbursement auditing arrangements. The methodology note provides specific guidance in four primary aspects of financial due diligence: (i) financial management assessment, (ii) project cost estimates and financing plan, (iii) financial analysis, and (iv) financial evaluation. When conducting due diligence, you will look at key issues of the business or product, including profits, financial risks, legal issues. You will conduct your due diligence before the transaction is finalized to verify if the acquisition is worth it. The advice, directions, and recommendations provided should not be regarded as a substitute for the professional judgment of ADB staff. Due diligence is an investigation into the business or product you are interested in buying. For financial intermediation projects, it is likely that additional activities will be required and staff should be guided by OM D6. Furthermore, the Guidelines, together with the methodology note, should be seen as a reference guide to assist staff in conducting an appropriate degree of financial due diligence during project preparation and processing, and should guide staff in determining the appropriate level of financial management safeguards required for a given project and/or EA and/or IA. Due Diligence Definition: A reasonable investigation of a proposed investment deal and of the principals offering it before the transaction is finalized to. This note is to be read in conjunction with the Guidelines and relevant sections of ADB Operations Manual (OM). Customer due diligence (CDD) is a process of checks to help identify your client and make sure they are who they say they are. This financial due diligence methodology note offers a suggested approach for operationalizing the standard project preparation and loan processing requirements of the Guidelines. The Financial Management and Analysis of Projects guidelines (the Guidelines) provide the framework for ADB's financial due diligence, namely completion of a financial management assessment (FMA) of the executing agency (EA) and/or implementing agency (IA), financial evaluation of the project, and assessment of implementation arrangements (from a financial perspective, including disbursement and auditing arrangements).
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