Fraud investigation hong kong

In the business world, due diligence is a type of investigation or an audit that is done when there is a potential investment or product that needed confirmation for its facts stated, which usually includes a review of financial records to a company or a business. Due diligence refers to the research that is made before two business leaders enter an agreement or a financial transaction with another company.

Investors are the ones who perform due diligence before they decide to purchase a security from a company. Due diligence can also be referred to as an investigation where a seller performs to a buyer that includes whether the latter has appropriate or adequate resources to complete any forms of purchases.

There are two common practices of due diligence that is usually being utilized in the world of business, the enhanced due diligence and the standard due diligence, in this article from https://www.suzzess.com/Enhanced-and-Standard-Due-Diligence.html let us discuss the differences between the two to provide you enough information to which one should you perform during a business agreement or partnership with another entity.

Enhanced due diligence

This type of investigation is needed where the customer and the product or service combination is considered to pose a bigger risk to the company. The higher the level of due diligence is needed in mitigating the increased risk as well. A high-risk situation usually occurs when there is an increased opportunity to perform corrupt practices or laundering the finance system by using the service or product that a business provides or from a customer.

This entails the enhanced due diligence to a dependent nature and the severity of the risk. There is an added due diligence that could take many forms from gathering additional information that is used for verification for the customers’ identity or the source of income. The checks could be relatively or proportionate to the level of risk that is identified and provided with confidence that any risk that has been mitigated, and that the risk would unlikely be realized after.

Fraud investigation hong kong

Standard due diligence

Unlike enhanced due diligence, this type of investigation is based on the level of due diligence that will be used, and these are the usual situations where there is also a potential risk, but it would be unlikely these risks will happen in reality.

Standard due diligence also requires to acquire the identity of the customer as well as verification of their identity and to add more, it also requires to gather information which enables you in understanding the nature of the business relationship.

Standard due diligence should always provide you with confidence about your customer’s identity to prevent any fraudulent or plundering act that the latter will do using your product or any other criminal activity that will have a negative effect to your company by conducting fraud investigation hong kong. Due diligence simply is a requirement in monitoring your customer and the relationship that exists between you and the latter in order to highlight any potential triggering events that could result in due diligence.