Due-diligence red flags are the early signals that a target is worth less, or carries more liability, than the seller's narrative suggests: opaque related-party dealings, customer concentration, unexplained margin swings, deferred maintenance, or gaps in contracts and consents. For a board, missing them means overpaying or inheriting problems that surface after the cheque clears. This research note sets out how red flags typically present in your chosen jurisdiction and industry, a structured framework for ranking them by severity and probability, the scenarios in which seemingly minor issues compound, the warning indicators experienced acquirers watch for, realistic impact ranges drawn from published deal post-mortems, and the controls that contain each one, with explicit guidance on when to bring in deal counsel, forensic accountants and specialist diligence advisers. It is research, not advice.
Reference material for informed readers, not advice.
