OVERVIEW OF WHAT DUE DILIGENCE AND BACKGROUND CHECKING PROCESS IS.

What is Due Diligence Background Checks – This simply means checking things or conducting comprehensive investigations on companies and individuals.

This could be in various areas such as when:

  • Buying a property – here you check titles of the property and verify information in the contract
  • Buying a business – it is important to do a financial due diligence of such a business to ascertain the financial condition, debts, assets, liabilities, and potential risks.
  • Making new or strategic hires – due diligence properly conducted before onboarding new employees may reveal history, reputation, use of social media, criminal record, driving record and a lot more.

Realistically, when you are looking at diving into any of the areas above, you do not expect everything to be perfect, but you want to make sure you check through items that might later be a cause for concern and make sure they never will be.

What are some of the reliable sources of Information when conducting due diligence?

  • Industry sources – within which the body is operating
  • Professional sources – People that have done research on this issue
  • Government – Ministries, Departments, Agencies, Investigative bodies, Law enforcement
  • Human – friends, neighbors, colleagues, business partners can be reliable sources for fact finding.

Why Conduct Due Diligence Background Checks?

Essentially, making informed investment decisions can only be by executing proper due diligence and background checks which in turn saves you time and money. You also get to have full knowledge of:

  1. Your investments i.e., properties, employees, stocks, etc.
  2. Your vendors
  3. Your business relationships
  4. The extent or nonexistence of risks

In the context of all four above, financial, tax, legal, accounting, reputational due diligence is some of the types that must be conducted to ensure stability, assess reputation, avoid potential risks etc.

WHAT CAN DUE DILIGENCE AND BACKGROUND CHECKS REVEAL?

  1. Potential risks
  2. Off balance sheet liabilities
  3. Tax position
  4. Noncompliance with policies
  5. Civil litigation
  6. Government sanctions
  7. History
  8. Pending judgement/litigation
  9. Criminal records.
  10. Environmental issues (in situations where the company needs environmental permits to operate)

And so much more.

Are you ready to protect your business?

If yes, please know that a legitimate business investment will have paper trail documentation and will never have you suspicious or unsettled in the process. Undergoing due diligence is the wisest thing to do before committing your money time and resources into anything.

If ever in doubt, hire a Certified Fraud Examiner!

Damilola Atiri. LLB. BL. CFE.

Advisory Services Manager

RabloWoods Professional Services Ltd.

Author

RABLOWOODS

Leave a comment

Your email address will not be published. Required fields are marked *

Open chat
Want to Become a Certified Fraud Examiner ?
Attend our next CFE exam review course and become a Certified Fraud Examiner in December 2021. Registration is Ongoing!
       Register Now for the CFE Exam Review Course Second Cohort.
     Date: December 3-5 & 10-12, 2021.
FILL THE FORM BELOW AND WE WILL GIVE YOU A CALL IMMEDIATELY
* we never share your data with third parties.