How Audit Helps Prepare a Business for Sale

Why Audit Is Crucial When Preparing a Business for Sale

Selling a business is a complex, multi-step process where every detail matters. One of the key tasks in preparing for a transaction is conducting an audit. It’s not just a formality — it’s a strategic move that helps identify business weaknesses, increase transparency, and ultimately boost market value.

Audit provides an objective view of the company’s current condition, verifies the accuracy of financial statements, and minimizes risks for potential buyers. It’s a critical factor that builds investor trust, reduces the likelihood of additional checks, and facilitates the due diligence phase.

What Type of Audit Is Needed Before a Deal

Before selling a business, it’s crucial to choose the right type of audit — this determines how deep and effective the review will be. Below are the main types of audit typically used in mergers and acquisitions.

Initiative Audit

This is a voluntary audit initiated by the business owner. It’s not required by law but is done in the company’s best interest — to identify internal risks, improve efficiency, and prepare for sale.

Includes:

• Analysis of accounting and tax records.
• Review of corporate structure and contracts.
• Identification of potential financial and legal risks.
• Optimization recommendations.

This type of audit helps "clean up" the balance sheet before entering negotiations, significantly increasing buyer confidence.

Mandatory Audit

For certain companies, an audit is legally required. In Moldova, it applies if the business exceeds specific thresholds related to revenue, assets, or staff size.

A mandatory audit is required if:

• Annual revenue exceeds 35 million MDL;
• Total assets are over 18 million MDL;
• Staff exceeds 50 employees.

Buyers pay special attention to such companies, expecting verified and independent reports — making the mandatory audit an essential part of deal preparation.

Specialized Transaction Audit (Due Diligence Audit)

This is a targeted audit conducted to evaluate a business prior to a sale or investment. Auditors review key areas that concern investors:

• Debt obligations;
• Corporate disputes;
• Potential tax risks;
• Transparency of accounting and business processes.

This type of audit becomes part of the due diligence process and can be initiated by the business owner or requested by the buyer.

Audit Stages in Preparing for a Business Sale

Preparing to sell a business requires a structured approach. The audit process is carried out in stages — from initial diagnostics to actionable recommendations. A clear step-by-step process helps avoid chaos and accelerates the path to closing the deal.

1. Pre-audit and Initial Diagnostics

At this stage, specialists perform a quick assessment of the company’s current status:

• check the completeness and accuracy of reports;
• evaluate readiness for due diligence;
• identify potential issues and risk areas;
• develop preliminary recommendations for correction.

Pre-audit allows vulnerabilities to be resolved in advance, before official investor review begins.

2. Main Audit Execution

This is a full audit of financial and operational performance:

• analysis of the balance sheet, profit and loss statement, and cash flow;
• reconciliation of tax obligations;
• review of contracts, receivables, and payables;
• assessment of accounting accuracy and compliance.

The goal is to produce an objective, documented picture of the business's state — ready for buyer evaluation.

3. Preparing the Final Report

Following the audit, the team prepares:

• an auditor’s opinion;
• a list of identified violations and risks;
• recommendations for resolving issues;
• strategic advice to increase investment attractiveness.

This report is the owner's key tool during negotiations with potential buyers.

4. Support in Implementing Recommendations

At the final stage, the audit team or external consultants may assist with implementing improvements:

• adjusting financial statements;
• restructuring assets;
• tax optimization;
• updating internal controls.

The result is a business fully prepared for sale, with minimal risks and a transparent structure.

Business Advantages During a Sale

Companies that conduct an audit before selling gain a significant competitive edge. It’s not just about compliance — it’s a strategic way to position the business on the market.

Increased Market Value

Audited financials inspire trust from investors and buyers. Transparent finances, no hidden liabilities, and a clean tax history allow the business to command a higher price. A company with an audit appears more stable and reliable.

Reduced Legal and Tax Risks

Audits help uncover and fix potential issues before the deal. This prevents post-sale lawsuits, penalties, or unpleasant surprises. Transparency also lowers buyer demands for warranties and indemnities, improving deal terms.

Simplified Due Diligence Process

When an audit is done in advance, it shortens the buyer’s due diligence timeline. The seller can quickly provide all needed documents, saving time and avoiding negotiation delays.

Boosted Trust and Brand Image

Having an audit opinion is a sign of a mature business. It shows that the company:

• maintains transparent reporting;
• understands and manages its risks;
• is ready for open dialogue with partners.

This reputation is a valuable intangible asset during the sale process.

Why Choose Intelcont.md

When selecting a partner for auditing before selling your business, it’s important to focus not just on cost but also on experience, expertise, and a comprehensive approach. Intelcont.md is one of Moldova’s leading firms in audit and financial consulting — making it the ideal choice for transaction preparation.

1. Comprehensive Audit Approach

Intelcont offers more than just standard bookkeeping checks — it delivers a full-scope audit covering:

• financial reporting;
• tax obligations;
• company legal structure;
• business processes and internal controls.

This allows for a “turnkey” sale preparation, detecting and resolving hidden issues before going to market.

2. Experience in Deals and Investment Projects

Intelcont’s experts support businesses through all M&A stages:

• pre-sale preparation;
• audit and legal check;
• consulting during negotiations;
• post-deal auditing (if needed).

Hands-on deal experience makes the team not only technically strong, but also strategically insightful.

3. Local Expertise

The company is deeply familiar with Moldova’s legal, tax, and economic specifics. This is essential for proper transaction structuring, investor readiness, and cross-border collaboration.

4. Reputation and Trust

Intelcont works with dozens of companies across sectors — from IT (including Moldova IT Park residents) to trade, real estate, and services. Its reputation is reinforced by long-term partnerships and numerous successful case studies.

Case Studies and Examples

Real-world examples are the best way to demonstrate how audits support business sales. Below are several practical cases where audit played a crucial role.

Example 1: IT Company — Moldova IT Park Resident

Client: mid-sized IT company from Chișinău preparing to sell a stake to an EU investor.

Issues before audit:

• unstructured financial reporting;
• lack of documented expense justification;
• non-compliance with IT Park activity regulations.

Solutions:

• internal audit initiated and aligned with IT Park rules;
• reconciled tax and accounting reports;
• due diligence documentation prepared in English.

Result: the buyer received full transparency, and the deal closed quickly with no extra legal or financial checks.

Example 2: Trade Company — Restructuring Before Sale

Client: FMCG distributor with over 40 million MDL annual turnover.

Challenges:

• significant receivables;
• undistributed profits;
• unclear subcontracting structure.

Solutions:

• an initiative audit was conducted;
• debt burden was optimized;
• contracts and supplier settlements were restructured;
• legalization strategy was developed.

Result: after implementing the recommendations, the company’s value increased by 15% in negotiations.

Example 3: Services and Consulting — Sale to a Strategic Partner

Client: law firm with B2B portfolio, preparing for partner buyout.

Intelcont solutions:

• an express audit was performed;
• risks in payroll processes were identified;
• an optimal tax structure was implemented.

Result: the deal was closed without claims, and the new owner continued to work with Intelcont as their accountant and auditor.

Common Mistakes in Preparing for Sale Without an Audit

Selling a business is a critical moment. Mistakes made during the preparation stage can derail the deal, reduce the company's valuation, or lead to legal consequences. Below are the most frequent issues faced by business owners who skip the audit.

1. Incomplete or Misrepresented Financial Reports

Without an independent review, owners may miss internal errors: double entries, incorrect VAT, or misclassified expenses. The result — buyer distrust and a prolonged due diligence process.

2. Unrecorded Tax Liabilities

Tax reporting mistakes are one of the top reasons deals fall through. Even minor discrepancies raise red flags and may require the seller to provide serious warranties.

3. Lack of Supporting Documentation

Buyers expect proof of all key transactions, contracts, purchases, and obligations. If documentation is missing, disorganized, or absent — it’s a major concern for investors.

4. Nontransparent Business Structure

Complex subcontractor schemes, unclear cash flow, under-the-table payments — these issues create doubts and drive down the company’s market value.

5. Deal Delays

Without a prior audit, owners often scramble to gather documents, fix reports, and justify inconsistencies. This not only delays the process but also weakens their negotiation power.

Tips to Avoid Mistakes:

• Start preparing at least 6 months before the planned sale.
• Conduct an initiative audit with a professional team.
• Use the audit not just as a check, but as a tool to improve your business.

Summary

Auditing in preparation for a business sale is not an expense, but an investment in a successful transaction. It helps uncover weaknesses, build buyer trust, and avoid costly legal or tax issues.

A timely audit:

• increases the business’s market value;
• simplifies negotiations with investors;
• reduces time spent on document preparation;
• minimizes legal and tax risks.

If you're planning to sell your business — start with an audit today.

The experts at Intelcont will guide you through the process with confidence. We’ll conduct diagnostics, offer recommendations, and support you through every stage of the sale.

👉 Get a free consultation — book now on intelcont.md or call us to discuss your project.