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Governance, Risk, Audit & Privacy · Foundational

Due Diligence

Investigation and analysis performed to understand risks before and while making decisions.

Definition

Due diligence includes assessing vendors before contracting, investigating acquisition targets, performing risk assessments, and monitoring controls. It demonstrates that management made informed decisions. Combined with due care, it supports a defense against negligence claims.

Example

Before an acquisition, the security team reviews the target's breach history and security program.

Exam tip

Pre-contract vendor assessment is due diligence.

Don't confuse it with

Related terms