Due diligence risk factors are the underlying concerns behind the risk assessment that is the basis of conducting a due diligence study. A variety of stakeholders can benefit from this procedure, including companies that wish to look at the target company prior to the merger or acquisition or investment; investors seeking a thorough risk assessment before investing; and employees evaluating potential candidates for employment.

Due diligence can include a variety of different checks depending on the intended purpose and scope. Typical checks include identity verification and screening against lists of sanctions and criminal watchlists, as also an investigation into the source of funds. A risk-based approach is required to determine if enhanced due diligence (EDD) or other measures, are needed. This is because customers who pose an increased risk of laundering or terrorist financing require additional measures, like the monitoring of transaction patterns and the collection of more information.

EDD can also involve analyzing the beneficial ownership of corporate customers to limit the risk of hidden ownership. This process can also include studying the structure http://www.getvdrtips.net of a company’s business activities and identifying any relationships with public officials that could cause bribery or corruption offenses. In addition, it is essential that EDD includes a regular review of the international sanctions lists to ensure compliance with the regulations.

A successful due diligence process will provide a concise summary of key findings for those who don’t have the time to read a full report. The summary should be brief, and should include the kind of business due diligence that was conducted (e.g. an extensive risk assessment prior deciding to invest in a company) as well as the rationale behind the due diligence; and any significant results of the due diligence.