The close investigation of the details of a merger, acquisition or other significant contractual arrangement to ensure risk and potential benefits are accurately gauged; this became commonly practiced in the United States, when the Securities Act 1993 was passed; due diligence is a way to systematically mitigate and analyse from an investment and business decision. 

Due diligence can be applied in various aspects of the organization; it involves carrying out an analysis on the organisation’s numbers, and comparing them for benchmarking over time. For employers  it is used to conduct background checks on potential employees. It is essential for organisations to practice this as it will help them in the near future.