The Analyst Who Tells You When Not to Buy

Before you buy a diligence report on anyone, ask the vendor one question. Is there anything to read.

Almost no buyer asks it. Almost no vendor volunteers it. The answer sometimes ends the sale, and a sale that ends is a sale nobody was paid for.

So the question goes unasked, the work gets done, and a document arrives. It is formatted. It has sections. It says almost nothing, because there was nothing filed to read in the first place.

That is the theatre this practice is named against, and the fix is not a better report. It is a question asked earlier.

What a forensic financial report actually reads

It reads filed public accounts. That is the whole mechanism, and everything else follows from it.

Where a subject files, and that means the United Kingdom, most of the European Union and the jurisdictions that behave like them, there are multi-year accounts sitting on a register. The work there is not what the numbers say. It is what they mean. Whether the cash is where the balance sheet claims. Whether the revenue has a shape a real business would produce. Whether the story the accounts tell holds together across years, or only across one.

Where the register is closed, the records still come, one document at a time. A certificate of good standing. Incorporation documents. The memorandum and articles. The register of charges. It is slower, it is narrower, and it is real. That route runs to the British Virgin Islands, the Cayman Islands, the Seychelles, Panama, the United Arab Emirates, Nigeria and Brazil.

And where a subject files nothing at all, no method reads numbers that were never published. Not mine, not anyone's. A United States private company. An individual. A non-filing entity. There is no technique that recovers accounts which do not exist, and any vendor implying otherwise is selling a shape rather than a finding.

The first question is not what did we find

It is whether anything was filed to find it in.

That question has an answer before the work starts, not after. It costs nothing to establish and it takes very little time. It is also the question that decides whether the entire engagement is worth commissioning, which is precisely why it is the one most often left until the report is already written and paid for.

Get it wrong and the failure is quiet. You do not receive a bad report. You receive a report that is technically accurate, properly formatted, and empty, and you have no way of telling from the document itself whether the emptiness is a finding about the subject or a fact about the register.

Those are very different things. One says the subject is clean. The other says nobody looked, because there was nothing to look at.

The incentive runs the wrong way

A report priced per subject earns its money by producing a report on every subject, applicable or not.

Nothing about that is fraudulent. The work is done, the document is delivered, the invoice is fair on its own terms. It is simply an arrangement in which nobody in the transaction is paid to tell you the product does not fit, and arrangements like that produce the outcome you would expect.

The only correction is to move the applicability question in front of the money, and to say out loud what happens when the answer is no.

So: if your subject files nothing public, I tell you before any report work begins, and you are never charged for a report I cannot produce.

That is not generosity. It is the condition that makes the rest of it worth anything. An analyst who only ever says buy is a salesperson. The one who tells you when not to buy is the one whose yes means something.

What this means for the two products

The Forensic Financial Report is the financial-condition screen. It reads the accounts and asks whether the money is real. It applies where there is something filed to read, and the qualification above is the first thing it answers.

Enhanced Due Diligence is the ownership and control screen. It asks a different question, and it asks it of subjects a registry search cannot answer for: who actually decides, as against whose name appears. That question survives in places the accounts do not reach.

Which of those two you need depends entirely on what you are trying to establish, and on what your subject has filed. That is a five-minute conversation, and it should happen before anyone quotes you a price.

→ Enhanced Due Diligence: the ownership and control screen

A product that cannot tell you when it does not apply is theatre. The honest one tells you first.