I have a client who is in the process of purchasing another business. We are talking £100-200k consideration - nothing big.
The solicitors have sent over a massive due diligence questionnaire and asked me to "review the due diligence as their input would be greatly appreciated, particularly in respect of the financial information provided to us".
I'm not currently engaged with the client for doing anything other than year end accounts and payroll compliance work. In the past I've done due diligence in house for a company in industry as an employee, so have done it before, but not as an accountant in practice, which I feel is quite a big difference.
My concerns are that potentially I am taking on a massive risk. Obviously I would need to get an engagement letter in place with an appropriate scope (although having not done it in practice I don't actually have a due diligence engagement letter), but I'm also very wary of the "can you just take a quick look at this - quick and dirty" approach as its easy to ask for and leaves one very exposed. My gut feel is that this should be done properly, or not at all. With fees accordingly.
If I decline to act personally he is likely to be very cross. Potentially it could be outsourced to another accountancy firm, or I could recommend that he seeks specialist advice?
What would you do in my situation?
Your thoughts on this would be welcome
(I'm ICAEW so bound by ICAEW code of ethics)