Due Diligence Process

Managing Due Diligence Process: Virtual Data Room for Audit

Business circles are constantly faced with the need to obtain real information about existing and future partners, their financial condition, creditworthiness, reliability, and other problems. The most reliable way to minimize risks in large transactions of an investment nature today is the Due Diligence procedure.

Due Diligence Technology for Managing Audits

At present, market participants are becoming more and more aware of the need to manage the risks of their activities, improve financial management, and form a balanced investment policy. The formation of new relationships between companies, the need to modernize production, develop relations with investors, and the possibility of entering international capital markets have led to the fact that the requirement for transparency of activities today is no longer a fashion but a mandatory requirement for both companies claiming leading positions in their markets and for smaller growing companies.

Due Diligence has ceased to be a practice peculiar only to the audit sector. Now, this procedure, as a rule, means carrying out a comprehensive analysis of the enterprise’s activities from the point of view of financial analysts, auditors, and lawyers, followed by the preparation of a detailed report on the state of the enterprise for the customer.

Conducting due diligence with the document-sharing platforms is one of the functions of comprehensive business research. It helps to establish a trusting relationship in connection with the conclusion and conduct of a major transaction between counterparties. Due diligence is usually carried out when buying a business or part of it or when buying large objects, such as real estate, in particular land.

So, you will need a virtual data room for audit if you or your company:

  • want to sell your business or buy a ready-made one;
  • intend to carry out a merger or acquisition of companies;
  • intend to create a joint venture;
  • going to apply to banks or financial institutions for a loan;
  • you want to truthfully show your potential partner or investor your solvency and solidity;
  • you want to check the reliability and solvency of your counterparty.

The Main Perspectives for the Virtual Data Room for Due Diligence

Speed up your workflows with the virtual data room software for audit. This advantage is especially important in mergers and acquisitions. In this case, the transaction cannot be successful without due diligence. VDR technology helps you do this with collaboration tools, the ability to integrate with other applications and bring everyone together in one environment. Thanks to version control, all team members have an overview of each stage of the project life cycle.

Through the study of the document sharing platforms and the possibility of restructuring (enterprises, individual structural divisions), assessing the quality of management, you can evaluate:

  • efficiency and stability of work;
  • risks in a particular business;
  • development potential;
  • industry risks, the impact of external factors.

The functionality of the virtual data room for audit is huge. A unique copy of the document, which is created every time a file is accessed or transferred, is visually indistinguishable from the original. It does not contain special characters, any labels, or other artifacts that would be visually noticeable and could be removed by an attacker. Confidentiality of information with the VDR is the property of information to be known only to admitted and verified (authorized) subjects of the system. (users, programs, processes, etc.). For other subjects of the system, this information does not seem to exist.