Which Diligence Work Should Be Handled by Independent Specialists?

Use an independent specialist when a material question requires expertise, testing, or independence your family office lacks in-house. Assign the work to answer a defined question the investment team cannot responsibly settle through its own review.

Choose Work That Needs Outside Skill

A CPA or forensic accountant can test whether financial records support reported results, trace cash movements, and identify unexplained differences. Transaction counsel can review entity structure, investor rights, ownership, plus contract terms. Ask your attorney about legal conclusions and your CPA about tax specifics.

Technical questions may call for an engineer, environmental consultant, cybersecurity reviewer, intellectual property counsel, or industry operating specialist. For a property, an engineer can assess physical condition or construction assumptions. For a technology company, a qualified reviewer can examine whether the company controls the code, data, or other assets its business depends on. An independent valuation expert can test the method and inputs for a hard-to-price asset.

Keep the assignment tied to the asset. An environmental review does not establish title. A financial review does not confirm customer demand. Specify what the expert must determine and which evidence falls outside the assignment.

Define the Scope and Deliverable

Put the scope in writing before work begins. Specify the question, records or locations to inspect, period covered, methods, deadline, plus deliverable format. Ask the specialist to list missing evidence, then state assumptions, exceptions, or limits. A useful report makes clear what was tested and what remains unknown.

For example, replace a general business review request with a question about whether reported revenue reconciles to bank deposits and invoices. Include customer contracts in the review and ask the reviewer to describe unresolved variances. For a construction budget, identify the plans, bids, contingency assumptions, and schedule to assess. Clear questions make the work easier to evaluate and reduce overlap between providers.

Check Independence and Access

Ask who pays the specialist and whether payment depends on closing. Find out whether the person has worked for the sponsor, seller, or another deal party. Ask who selected the expert and who can change the scope. A sponsor referral does not settle the independence question. Confirm your team can receive the work product and ask follow-up questions.

Give the specialist access to underlying records and the right people to explain them. If access is restricted, document the restriction and how it limits the conclusion. If two experts disagree, compare their evidence and methods. Check whether their scopes differ before deciding if more work is needed.

Checklist

• Use an outside expert for a material question beyond in-house skill or independence.
• Write the question and evidence into the scope. Specify timing, deliverable format, and limits.
• Ask the specialist to state missing records, exceptions, plus assumptions.
• Disclose payment terms and prior relationships with deal parties.
• Confirm access to source documents and follow-up discussions.
• Connect each finding to a decision, condition, or unresolved risk.

Read next: How should a family office prioritize diligence when time is limited? and What is a sensible diligence budget for a direct investment? and How can an investor tell when a diligence provider has a conflict of interest?

We are open, we like to work with external specialists and it is also interesting that our sort of new business often comes by references within our network.

Sources: Family Office Club investor due diligence framework, How to Start a Family Office, The Family Office Book. Informational only, not financial, legal or tax advice.