Due Diligence Risk Factors

Due diligence risk factors are a part of an enterprise or project that must be assessed to determine if there are risks to the goals or goals. These include the financial and legal aspects content as well as the IT and operational aspects of a company. A typical example of due diligence is customer due diligence (CDD). Validating a person’s identity and assessing their risk level is a part of this procedure. It helps ensure the compliance with anti-money laundering and anti-terrorism laws. CDD typically happens before an individual customer is accepted into the company and is then repeated periodically throughout their relationship with the company. It is crucial to know how often each risk category must be reviewed. For example it’s excessive and insignificant for an organisation to undertake CDD on every country, project or business associate it has around the world, especially when a few of them have a low risk of corruption. The company should therefore utilize its GIACC program to determine and categorize countries as well as projects and business partners based on the likelihood of them being corrupt, with appropriate due diligence conducted on those considered to be more than a low risk. Another example of due diligence is IT due diligence, which includes an evaluation of a target company’s IT infrastructure security, data management and cybersecurity practices. This can identify any potential risks or costs associated with the acquisition of a firm, such as hardware or software that may require replacement. This can also highlight any weaknesses in the IT system that could lead to the disclosure of sensitive or private information.