Due diligence is an investigative process that a business or organization undertakes to confirm the accuracy of another party’s claims or representations. It’s most commonly used prior to entering into an agreement such as a merger, acquisition, or investment. The goal is to verify that all facts related to the entity being investigated are genuine and accurate. This includes evaluating financial records, legal documents, background checks, and internal processes. Essentially, due diligence is a comprehensive investigation that seeks to protect both parties involved in a transaction by uncovering any potential risks or liabilities.