Due diligence

Due diligence is the process whereby the people that run a financial institution, such as a bank, are required to ensure that it is run correctly and ensure that they operate prudently.

It is also used generally to explain the process whereby the books of a company are examined carefully before a merger activity or when one company buys another, it will undertake due diligence; sometimes before working with another company due diligence also takes place.

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