Reports that examine the financial aspects of a proposed decision, such as acquiring another company, are called due diligence reports.

Question

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The concept of "due diligence" requires that a company do its homework with regard to the financial aspects of an opportunity, transaction, or investment. Specifically, what are the risks, possible gains, likely outcomes, obligations to others, tax exposure, and so on to the company? A responsible company or individual is expected to carry out due diligence for all of its financial decisions.

Reports That Examine the Financial Aspects of a Proposed Decision