Dubinina M., Doctor of Economics, Professor, Head of the Department of Accounting and Taxation, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0002-3993-0622
e-mail: dubinina@mnau.edu.ua

Buganov O., applicant for higher education of Accounting and Finance faculty, Mykolayiv NationalAgrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0002-2068-0440
e-mail: perhapsdesigner@gmail.com

The Essence, Purpose and Features of Using of Due Diligence

Abstract. Introduction. The present stage of market relations development is characterized by the increase of business activity of business entities through the attraction of foreign investments, the opening of branches, increase of efficiency of use of resources. This contributes to the increase of employment of the population, an increase of production volumes and its realization, additional sources of financing of activity of economic entities appear. However, such trends increase legal and financial risks: loss of investor assets, weakening of competitiveness, loss of business attractiveness, loss of market share. One way to minimize business risks is to use the Due Diligence procedure.

Purpose. Research of the Due Diligence procedure as a means of making informed decisions, as a mechanism for ensuring the success of the development of business entities, as a tool for identifying risks when investing projects, as a procedure for checking the legal state of business.

Results. Due Diligence plays a big role in management companies, allowing to execute, reduce or minimize negative consequences. Its use makes it possible to accurately and timely identify threats to the entity's activities and make appropriate decisions within the risk management policies that it has developed. This process makes it possible to establish a trusting relationship between the buyer and seller of a business or asset.

Conclusions. Due Diligence is one of the stages of the acquisition of assets, as it helps the investor to form an idea of the product of sale, the possible risks at the time of appropriation of the property, the crisis situations that may arise after the conclusion of the transaction. The tool is based on the analytical evaluation of information on changes in the external and internal environment of the enterprise by checking all components of the business, in particular: legal, financial, accounting, tax, marketing, information, management, environmental, technical, operational nature.

Keywords: Due Diligence; verification; representative result; the value of the activity; investments.

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