Due Diligence Risk Factors

Due diligence risk factors are areas of an organisation or project which must be assessed for possible risks to its objectives and goals. These include the financial and legal aspects and the operational and IT elements of a business.

Customer due diligence (CDD) is a good example of due diligence. Validating a person’s identity and assessing their risk is a component of this procedure. It assists in ensuring the compliance with anti-money laundering and anti-terrorism laws. CDD typically happens before the first customer is welcomed and is then repeated regularly throughout their relationship with the firm. It is crucial to know how often each risk category needs to be re-examined.

It is unreasonable and untrue to expect an organisation to conduct CDD on all countries, projects, or business associates it has around the world particularly if some of them only have the risk of corruption at a minimal level. A company should use its GIACC program to categorise and identify countries as well as projects and business partners based on the probability that they could be a source of corrupt activity. Due diligence should be conducted on those that are deemed to pose a higher risk.

IT due diligence is a different instance of due diligence. This includes an assessment of the company’s IT infrastructure, cybersecurity, and data management practices. This can identify potential risks or costs associated with the purchase of a target, like replacing equipment or http://www.getvdrtips.net/angel-investor-due-diligence-checklist software. This could also reveal any IT system flaws that could expose sensitive information.

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