A due diligence report is a summary of the due diligence process. In it, risk and compliance teams will detail the research they completed, the information they uncovered and recommendations for how to proceed with the business relationship.
Based on this due diligence report definition, a thorough report will give executive teams the insights they need to make a strategic decision about the new entity. This can help your organization avoid breaches, leaks and exposure to bribery and corruption.
Essentially, every time you complete due diligence, you should also complete a report. The report's contents may vary based on whether it’s for a merger or acquisition, a third party or, increasingly, for data privacy.
There isn’t one group or team responsible for due diligence reports when you’re creating them inside your organization. The risk and compliance team is typically involved, but different teams within the enterprise should lend their expertise to ensure the report is as thorough as possible. For example, if you’re completing cyber due diligence, you should include your cybersecurity teams, as they’ll know what to look for.
Many organizations also outsource their reports to external advisors or services.
A due diligence report aims to recap the process and help your organization use that process to make a strategic decision. With that in mind, most data from due diligence should be in the report. This includes:
There is no single standard for what a due diligence report should look like. The appearance of your report may vary based on the type of due diligence you’re performing, as well as the nature of the business relationship.
Understanding the structure and content of a due diligence report by reviewing a template or examples can help investors better understand the structure and content of these reports. Thus, aiding the preparation for their own due diligence investigations or reviewing reports prepared by others.
Viewing sample due diligence reports can also contribute to identifying critical areas of risk and opportunity associated with an investment opportunity, which can help investors focus their due diligence efforts on areas that are most likely to impact the success of their investment.
A due diligence report organizes and presents the information from due diligence in a format accessible and useful to the C-suite. Many organizations follow a checklist.
To prepare a due diligence report, start by collecting all information and documentation from due diligence, then complete the following steps:
In short, the answer is yes.
While certain aspects of due diligence reports can only be completed in-house, for many compliance teams, the task of completing due diligence and creating and maintaining accurate, up-to-date reports can be time consuming and risky.
Oftentimes organizations find themselves in at least one of the following scenarios:
The good news is technology can help overcome these challenges to provide more comprehensive information with greater reliability for improved risk analysis, which translates to better business decisions.
Due diligence should be reliable, scalable and effective. Yet, the sheer amount of information and the number of teams involved in both due diligence and its reports can make it difficult to coordinate this effort — even with a thorough due diligence report process in place.
Due diligence services can streamline this process for you by offering a global team of analysts and investigators, risk-based assessments and critical business insights that can be difficult to uncover on your own.
Due Diligence Services from Diligent deliver the intel you need in a format customized to your business, all of which includes real-time insights using Global Database Check (GDC) and comprehensive online research.
