Independent Business Reviews are often demanded by lenders, investors and venture capitalists before finalising a lending or investment decision.
Whether management is seeking additional funding, or lenders or investors require reassurance as to the viability of the business, an Independent Business Review will provide a sound base from which management, lenders and investors can move forward.
Directors do not normally have much say in the choice of the reviewing accountant - the bank or investor will usually choose him from a panel of accountants selected by the particular bank or investor. The reviewing accountants' principal client relationship will be with the bank or investor and not the company - although the company is always responsible for the costs of the Independent Business Review. Normally, the bank or investor will introduce the prospective reviewing accountant to the directors before the instruction is finalised. This gives directors the opportunity to discuss and agree the costs and timing of the Independent Business Review.
Generally, the reviewing accountant will seek to agree his fee on a time cost basis, and he will prepare an estimate of the expected fee based on the directors' representations regarding the quality of information that they will provide to the reviewing accountant. It is important that directors are honest in the representations that they make to the reviewing accountant - misleading information is likely to lead to additional costs that the company will be expected to pay and may create an atmosphere of mistrust.
Directors should expect an Independent Business Review to add some value to their business - it is therefore important for directors to consider carefully the reviewing accountants' terms of reference.
Typically, an Independent Business Review would include an assessment of:
- current trading and financial position;
- profit and cashflow projections;
- business and financial strategies;
- sensitivity analysis;
- management and systems;
- bank security cover; and
- the way forward for the business.
The reviewing accountant relies upon the co-operation of the management when preparing his report and one of the first things he will notice is whether the directors are genuinely on top of the financial situation or not, and whether they have a clear view of the future.
The next step
If you would like to discuss an independent business review in more detail, please contact one of our turnaround and recovery specialists at your nearest location, or complete the contact form.
Andrew Andronikou and Peter Kubik were appointed as Joint Administrators to Convers Sport Initiative plc (CSI).
HMRC was responsible for 58% of all the petitions submitted over the last year to wind-up companies compared to just 43% in the previous year, reveals research by UHY Hacker Young. 
Our Joint Administrators Andrew Andronikou, Peter Kubik and Michael Kiely have issued their Six Month Report to Creditors, in accordance with R2.47 Insolvency Rules 1986.
In accordance with Paragraph 51 of Schedule B1 of the Insolvency Act 1986, a creditors’ meeting has been convened at Portsmouth City Football Club on 6th May at 11am. The meeting is restricted to creditors and their representatives only.
Our Manchester office has been appointed receivers of Brookside Close, the legendary Liverpool cud-de-sac where the popular Channel 4 soap opera Brookside was filmed until 2003.
Andrew Andronikou and Peter Kubik, Partners at our London office Turnaround and Recovery Department have been appointed administrators of the assets of Butler and Tanner Printers Ltd.
Select Retail, the national women’s fashion retailer, was placed into Administration on Friday 22nd February 2008, against a backdrop of its deteriorating trading performance in the first quarter of 2008. Our Turnaround and Recovery specialists moved quickly to evaluate the business and negotiate the sale of approximately half of the 250 retail units to a management buy-out team. 
