Overview

As a process of reviewing a potential investment, due diligence analysis is a key step in decision-making. It ensures that all relevant information has been considered and potential risks identified.

The goal of due diligence is to provide a comprehensive understanding of the potential of the investment and complete information, so during the process, special attention should be paid to:

• Incomplete or incorrect information can lead to wrong conclusions and bad decisions. It is essential to ensure complete relevance and accuracy of information
• Incongruent goals with the general objectives of the investment. Due diligence should be conducted to identify potential risks and assess their impact so that the results can be helpful
• Conflict of interest may arise when the person or organisation conducting the analysis has a personal or financial interest in the outcome of the process. This can lead to biased or incomplete estimates
• Limited scope of analysis due to which essential risks are neglected. The scope of the process should be carefully defined and sufficient to cover all relevant aspects of the potential investment
• Time constraints because due diligence is sometimes a long-term process, and setting aside enough time for the analysis is essential. Important risks may not be identified if the due diligence process is rushed. Depending on the specific situation and type of investment