Due Diligence: 50 Finance Questions

Quick View

Why It Matters

Investors compare the pitch with statutory records, contracts, bank statements, tax returns, customer data and board papers. Inconsistency is often more damaging than an honestly disclosed issue.

The finance team should maintain a question log with owner, document, answer, risk, remediation and disclosure status.

Material exceptions should be disclosed with context and action. Hiding a problem that later appears can damage valuation, terms and trust.

Control Framework

Action Checklist

1. Run a quarterly diligence mock review.
2. Reconcile pitch metrics to source data.
3. Build a controlled data room.
4. Prepare exception disclosures.
5. Assign Q&A owners.
6. Track remediation before investor access.

Practical Example

Evidence to Keep

• Corporate and cap-table file.
• Audited and management financials.
• Bank, debt and covenant records.
• Tax and FEMA filings.
• Material contracts and HR records.
• Diligence Q&A and disclosure log.

Warning Signs

Management Decision

Prepare answers that identify source, period, definition and limitation. A concise documented answer is stronger than a long unsupported narrative.

Escalate any inconsistency involving ownership, cash, revenue, tax, IP or regulatory authority before the investor discovers it.

Record the decision, owner, due date and evidence expected. A verbal explanation should become an approved working, board note, contract amendment, statutory filing or reconciliation before the item is treated as closed.

Rules, forms, thresholds and procedures can change. Use the latest official source and the actual company facts rather than copying a prior-year control or another entity’s legal position.

Exception Review

Classify every exception as a timing difference, data error, missing document, legal non-compliance, control-design gap or control-operating failure. This prevents management from treating fundamentally different problems as one ageing list.

The exception file should show amount or exposure, root cause, immediate correction, preventive action, owner and board-escalation threshold. Repeated low-value issues can become material when they reveal weak systems or management override.

Close the item only after the evidence agrees across source documents, books, portal data and management reporting. A screenshot or email promise is not equivalent to a completed filing, lender waiver, signed contract or reconciled ledger.

Investor Question Bank

1. Who legally owns every security and instrument?
2. Do statutory registers agree with the cap table?
3. Are all share issues and transfers properly approved?
4. Are ESOP grants, vesting and exercises reconciled?
5. Do investor rights match the latest agreements?
6. Are board and shareholder approvals complete?
7. Do audited accounts agree with filed returns?
8. Can revenue be reconciled to contracts and invoices?
9. Are management KPIs defined and consistent?
10. Are customer collections and receivables supported?
11. How concentrated are revenue and gross margin?
12. Are refunds, credits and churn fully captured?
13. Does cash runway include statutory and committed payments?
14. Are all bank accounts and payment gateways reconciled?
15. Are borrowing and covenant obligations current?
16. Are security charges created and satisfied correctly?
17. Are GST returns reconciled to books?
18. Are TDS liabilities, returns and certificates complete?
19. Are income-tax positions and notices tracked?
20. Are related-party transactions approved and priced?
21. Are transfer-pricing records contemporaneous?
22. Are FC-GPR and FLA filings complete?
23. Are ODI and overseas subsidiaries compliant?
24. Are import and export records complete?
25. Are labour, PF and ESIC obligations current?
26. Is the POSH committee lawfully constituted?
27. Do employment contracts protect IP and confidentiality?
28. Are employee exits and access removals controlled?
29. Does the company own its software and brand IP?
30. Are contractor IP assignments signed?
31. Are customer and vendor contracts executed?
32. Are renewal and termination obligations tracked?
33. Are indemnities and liability caps understood?
34. Is personal data mapped and access controlled?
35. Are cybersecurity incidents and complaints recorded?
36. Does accounting software preserve audit trails?
37. Are internal financial controls tested?
38. Are vendor bank changes independently verified?
39. Are credit notes and bad debts approved?
40. Are inventory and fixed assets verified?
41. Are legal disputes and claims disclosed?
42. Are insurance policies adequate and current?
43. Are regulatory licences and approvals valid?
44. Are contingent liabilities quantified?
45. Are tax, legal and accounting positions consistent?
46. Are forecasts supported by operational assumptions?
47. Is customer concentration stress-tested?
48. Is founder spending independently reviewed?
49. Are all material exceptions in the data room?
50. Can every answer be supported without founder memory?