detailed check of firm's accounts before sale the examination of a company's accounts prior to a potential takeover by another organization. This assessment is often undertaken by an independent third party.
Related definitions of "due diligence"
- Abbr DD
2. General Management
investigation of firm before purchase or investment the collection, verification, analysis, and assessment of information about the operations and management of a company undertaken by a potential purchaser or investor. Due diligence aims to confirm that the purchaser or investor has an accurate picture of the target company and to identify risks and benefits associated with the prospective deal. Due diligence usually starts after the signing of a letter of intent by both parties and information disclosed during the process is normally protected by the signing of a confidentiality agreement. Due diligence often leads on to negotiations on the detailed terms of the agreement. The process may cover the financial, legal, commercial, technical, cultural, and environmental aspects of the organization's operations as well as its assets and liabilities, and may be conducted with the assistance of professional advisers.