Few Confident They'll Manage M&A Risks in Emerging Markets Well in 2015

Corruption, money laundering and fraud overlooked in pre-deal diligence

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Mar 31, 2015, 10:07 ET

NEW YORK, March 31, 2015 /PRNewswire/ -- Few executives are confident (10.4 percent) their companies will manage M&A risks in emerging markets well during the next 12 months, according to a recent Deloitte Financial Advisory Services poll. Nearly as many (11.6 percent) say their organizations conduct no pre-deal diligence for compliance and integrity risks including corruption, money laundering and fraud.

"When deal timelines are compressed, the M&A market is strong and confidentiality agreements loom it may be tempting to take shortcuts in certain diligence areas such as fraud, FCPA and other integrity risks," said Bill Pollard, a partner in the forensic investigations practice of Deloitte Financial Advisory Services LLP. "But, the DOJ, SEC and other enforcement agencies expect your pre-deal diligence will be strong. We've seen robust analytics really help change the game in identifying M&A compliance and integrity concerns, but few companies have the level of capability they should."

Only 26.8 percent of respondents' companies use analytics to help analyze and identify integrity risks in emerging market pre-deal diligence.

"The overall volume of data available on any acquisition target seems to grow annually, making it easier today than ever before to get a good view into compliance and integrity risks involved before deals close," said Rob Biskup, a director in the forensic investigations practice of Deloitte Financial Advisory Services LLP. "The challenge many companies face is in aggregating and analyzing large quantities of disparate data efficiently and effectively. Although analytics and data visualization platforms can help them do just that, adoption and deployment of such robust analytics solutions continues to lag."

About the poll
More than 1,300 professionals from industries including financial services; technology, media and telecommunications; and, consumer and industrial products responded to polling questions during a Feb. 25, 2015 webcast, titled "The Importance of Integrity Due Diligence in Emerging Markets M&A." Click here to listen to the webcast.

As used in this document, "Deloitte Financial Advisory Services" means Deloitte Financial Advisory Services LLP, which provides forensic, dispute, and other consulting services, and its affiliate, Deloitte Transactions and Business Analytics LLP, which provides a wide range of advisory and analytics services. Deloitte Transactions and Business Analytics LLP is not a certified public accounting firm. Please see http://www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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SOURCE Deloitte