Due diligence risk factors are the underlying concerns behind the risk assessment that goes into the process of conducting a due diligence investigation. This process can be beneficial to a wide range of stakeholders, from acquiring firms seeking to assess their target firm before a merger or acquisition; investors who want an exhaustive analysis of risk prior to investing; and prospective employees who want to evaluate potential http://www.getvdrtips.net candidates for employment.

Due diligence could include a variety of checks, dependent on the purpose and scope of the procedure. Checks can include identity verification, screening of sanctions lists and criminal watchlists, as well as an investigation into funds sources. A risk-based approach is required to determine if enhanced due diligence (EDD), or other measures, are needed. This is because customers that pose the highest risk of money laundering or financing terrorists need additional measures, including more frequent monitoring of transactions and the collection of more information.

EDD could include evaluating the beneficial ownership of corporate clients to minimize the risks of hiding ownership. This could involve examining the structure of the company and identifying connections with public officials which could result in corruption. EDD must also conduct a regular review and update of the international sanctions lists in order to ensure compliance.

A successful due diligence process must provide a concise overview of key findings to those who do not have the time to read a complete report. The summary should be brief and include the kind of business due diligence performed (e.g. the complete risk assessment before an investment in an organization) and the purpose behind the due diligence; and any important conclusions derived from the due diligence.