Due Diligence Risk Factors

Due diligence risk factors are aspects of an enterprise or project that need to be evaluated to determine if there are any risks to the goals or goals. These include the legal, financial operational and IT aspects of a business.

One of the most common examples of due diligence is customer due diligence (CDD). This involves confirming an individual’s identity and assessing their degree of risk to ensure that they are in compliance with anti-money laundering regulations and countering the financing of terrorism laws. CDD is usually performed before a customer is onboarded and periodically throughout their relationship with the company. It is crucial to know how often each risk type should be reviewed.

It would be unreasonable and disproportionate to expect an organisation to conduct CDD on all of the countries, projects or business associates it has around the globe particularly if some of them have the risk of corruption at a minimal level. The company should therefore utilize its GIACC program to determine and categorize countries, projects and business associates based on the likelihood of them being corrupt sources and also ensure that due diligence is performed on those considered to pose greater than a low risk.

IT due diligence is a different instance of due diligence. This includes an assessment of the target company’s IT infrastructure as well as cybersecurity and data management practices. This is a way to identify any potential risks or costs associated with the acquisition of a firm, such as equipment or software that may need to be replaced. It also can identify any IT system vulnerabilities that could expose sensitive information.

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