Due diligence risk factors are the main aspects of the risk assessment that is the basis of conducting a due diligence investigation. The process can be beneficial to a broad range of stakeholders, including acquisition companies looking to evaluate their target firm before a merger or acquisition; investors seeking an accurate assessment of risk prior investing; and prospective employees assessing possible employment candidates.

Due diligence may require a variety of different checks, based on the intended purpose and scope. The most common checks are identification verification, screening against sanctions lists and criminal watchlists, as also an investigation into the source of the funds. A risk-based approach is needed to determine if enhanced due diligence (EDD) or other measures, are needed. Customers who are at a higher-risk of money laundering and financing of terrorists will require additional measures such as the monitoring of transactions patterns and gathering more information.

EDD can also include assessing the beneficial ownership of corporate http://www.getvdrtips.net clients to mitigate the risk of hidden ownership. The process can include examining the structure of the company, and identifying any possible connections with public officials which could result in bribery. In addition, it’s vital that EDD includes periodic reviews of international sanctions lists to ensure compliance with the regulations.

A successful due diligence process should include a concise summary of the main findings for those who don’t have the time to read a full report. The summary should be concise and should contain the type of due diligence conducted (e.g. an extensive risk assessment prior deciding to invest in an organization) and the purpose behind the due diligence; and any important conclusions derived from the due diligence.