Due diligence is the process of investigating a person, business, or financial transaction to establish the value of the entity or transaction and the cost of any associated liabilities. The investigation should identify the presence of certain risks or confirm the absence of such risks. A due diligence audit may refer to either an investigation of an entity/transaction or an audit of the due diligence investigation process itself.

Due diligence investigations are often undertaken by persons or organizations when they are interested in acquiring another business or property or are otherwise becoming involved in a financial transaction.
Therefore, common objectives of a due diligence audit are to ensure that a proposed action will:

• Enhance the value of the organization.
• Be consistent with strategic objectives.
• Avoid hidden liabilities.