How to think abut seller not providing full access to accounting software?

searcher profile

April 15, 2024

by a searcher from Northwestern University - Kellogg School of Management in Newtown, PA 18940, USA

I"m posting anonymously because the brokers are active here.
Under LOI and in the diligence process, about to start QoE. Seller is stating they are not willing to provide accounting access as the scope of the QoE is only the past 2-3 years.
This feels off to me. Thoughts and perspectives on how to think about this issue?

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commentor profile
Reply by a searcher
from University of Virginia in Miami, FL, USA
What was their reasoning for it? I could see a seller not wanting you to do a QoE on 5 years+ of accounting data (2-3 is the norm), so perhaps you explain that the scope of QoE is 2-3 years but you'd like to see more historical data to get an understanding of the longer term growth trajectory, and you fully understand those are more dated historical financial statements...
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Reply by a professional
from The Johns Hopkins University in Basking Ridge, NJ 07920, USA
QoE is only one aspect of diligence. Are they refusing to produce the underlying data or just limiting your access to their software? There are many other reasons to justify the broader scope. I think you need to see if you are on the same page with the seller as to rationale for denying access, but certainly raises a flag.
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