Due diligence is a crucial process aimed at evaluating all aspects of a business or a specific investment before finalizing a transaction. Below are the essential steps involved in preparing for due diligence:

1- Legal Document Review

• Example: Reviewing legal contracts and licenses.
• Details: This involves examining all legal documents such as purchase agreements, employment contracts, licenses, patents, and trademarks.

2- Financial Data Analysis

• Example: Auditing financial statements.
• Details: This includes reviewing the financial records of the target company, such as the balance sheet, income statement, and cash flow statement. The goal is to ensure the accuracy of the financial data and verify the company's financial health.

3- Business Operations Evaluation

• Example: Reviewing supply chain and production processes.
• Details: Assessing the company's business operations, including its supply chain, production processes, quality control, and overall efficiency.

4- Market and Competition Analysis

• Example: Studying the market for the product or service.
• Details: This involves analyzing the target market, understanding customer behavior, studying competitors, and evaluating market share and current trends.

5- Human Resources Analysis

• Example: Evaluating the management team structure.
• Details: Reviewing the company's HR structure, verifying employee records, and examining HR policies and benefits.

6- Technology and Systems Evaluation

• Example: Reviewing the company's technological infrastructure.
• Details: This step focuses on examining the technological systems in place, assessing cybersecurity measures, and evaluating the overall IT infrastructure.

7- Risk Analysis

• Example: Identifying of risks legal and regulatory.
• Details: Identifying potential risks, including legal, regulatory, and financial risks, and developing strategies to mitigate them.

8- Environmental Assessment

• Example: Evaluating the company's environmental impact.
• Details: Reviewing the company's environmental obligations, analyzing the impact of its operations on the environment, and ensuring compliance with environmental laws.

Practical Examples

1. Technology Company:
2. Legal Document Review: Examine intellectual property agreements and patents.
3. Financial Data Analysis: Audit profit and loss reports from the past three years.
4. Business Operations Evaluation: Review software development processes and system security.

In conclusion, we have reviewed the steps involved in conducting due diligence, along with practical examples. In Saudi Arabia, the government employs due diligence procedures as part of its efforts tocombat money laundering In the country.