Due Diligence Report

What is a Due Diligence Report?

A due diligence report is a comprehensive document prepared after conducting an investigation into a company, vendor, or investment opportunity. It consolidates findings from financial, legal, operational, and compliance reviews to assess potential risks, liabilities, and opportunities before making a business decision.

Due diligence reports are commonly used in mergers and acquisitions (M&A), vendor onboarding, investment evaluations, and compliance checks.

Why a Due Diligence Report Matters

A due diligence report is essential because it:

  • Identifies risks such as financial instability, legal disputes, or compliance gaps

  • Supports informed decision-making in acquisitions, partnerships, or contracts

  • Ensures compliance with regulatory and industry requirements

  • Protects stakeholders from reputational and financial harm

  • Strengthens negotiations by highlighting risks and opportunities

Key Components of a Due Diligence Report

  1. Executive Summary – Overview of key findings and recommendations

  2. Corporate Information – Ownership, structure, and governance details

  3. Financial Review – Revenue, liabilities, tax compliance, and audited accounts

  4. Legal Review – Ongoing litigation, intellectual property, licenses, and contracts

  5. Regulatory & Compliance Review – Adherence to laws like GDPR, AML, SOX, HIPAA

  6. Operational Review – Business processes, supply chain, and technology systems

  7. Risk Analysis – Identification and categorization of potential risks

  8. Conclusion/Recommendation – Summary of whether the deal or relationship should proceed

Example of a Due Diligence Report in Action

Before acquiring a startup, an investment firm commissions a due diligence report. The findings reveal strong revenue growth but also highlight pending litigation. This allows the firm to renegotiate the acquisition terms and mitigate risk.

Due Diligence Report vs. Due Diligence Questionnaire (DDQ)

  • Due Diligence Report – Final document consolidating the findings of an investigation.

  • DDQ – The initial questionnaire used to collect structured information from the target organization.

How VComply Can Help

VComply streamlines the due diligence process by automating evidence collection, risk assessments, and compliance checks. Its platform enables organizations to:

  • Standardize due diligence procedures across departments

  • Track vendor and partner compliance in real time

  • Store and manage due diligence reports securely

  • Assign accountability and monitor corrective actions

With VComply, businesses can make better decisions, reduce risks, and stay compliant when preparing and managing due diligence reports