Due Diligence is an investigation of a business whether in whole or in part depending on objectives and desires of each customer. It might be performed for various purposes but mainly for the customers to know a target business’ financial position and performance. The customers will receive basic information which helps in business consideration and later contributes in considering the possibility before or after making acquisition (Pre and post-acquisition review) so that they know the information or some product more in detail. In addition, it is undertaken so that the customers know the information or fact which leads to decision making in merger, demerger or divest the business that they think does not make much profit as anticipate, or leads to price or business valuation as well.

For this reason, it is necessary for service providers for due diligent to fully understand characteristics of business in which the customers are interested, working environment, business problems and risks which the companies faced in the past, are facing in the present or may be face in the future.

The scopes of service of Due Diligence inquiry can be divided into 3 main types as follows;

1. Financial Due Diligence

An investigation of the business’ financial position placing emphasis on the financial data derived from reviewing financial figures and data in order to know the correctness of such data and to analyze possible impacts on property’s value, liabilities or capital which might make a difference from the data in accounting or financial statement on the stipulated date.

2. Legal Due Diligence

An investigation in law, rules, regulation, specific types of tax as well as contracts made between the companies and outsiders or company’s employees in order to know the rights and duties, encumbrances or liabilities which might have an effect on the business’s operation or a binding effect on a person who acquires the business.

3. Operational Due Diligence

An investigation of possibility in operation in order to know strengths and weaknesses of the current business operation. If the acquisition already occurs, this helps the purchaser to know how to make a change. However, the performance levels of Operational Due Diligence which consist of Desk Top Review and In Depth Review depends on reasons and desires of the customers.