Definition of Due diligence

Due diligence is the act of investigating any potential investment, usually through an auditor or an audit process. Due diligence is essential to any financial process, and the purpose of it is to ensure that all facts presented (financial statements, solvency, management structure etc.) are accurate and true.

Due diligence is usually carried out by an audit firm, or by some of the junior employees in the firms involved. Despite not being very prestigious or well thought of, due diligence is vital to ensure safety and peace of mind for parties involved in a transaction.