DUE DILIGENCE IN THE COMPANY'S LEGAL AUDIT SYSTEM

Abstract

The research was conducted in order to assess Due diligence in the system of legal security of companies' activities as one of the stages of economic control and, in particular, audit and improvement of its methodology. Due diligence audit is more associated with the analysis of investment objects, which includes an assessment of investment risks, an independent assessment of the investment object, a comprehensive audit of the financial condition of the company, and, to a lesser extent, with its position on the market and, most importantly, with the legal security and security of both the company and its management. The legal audit is not fully developed for practical use and does not contain research questions that are in demand by company executives and investors. Based on proposals for Due diligence by audit companies and the requirements of the parties interested in the audit, tools were proposed, a step-by-step risk assessment of the company, a checklist and an algorithm for conducting Due diligence audit as one of the areas of legal audit, and typical violations were identified that contribute to orientation in the search for illegal actions, including for preventive purposes, which in general, it allowed to improve the methodology of Due diligence audit. In the course of the research, general scientific methods of logical analysis and synthesis were used, in particular, analogies, typologies, generalizations. Based on the study of extensive empirical material, the features of the implementation and detected violations during Due diligence audit are investigated. The practical significance of the article is that the conclusions and proposals are aimed at the development of modern economic control and contribute to business optimization. The study conducted by the authors revealed that the new reality has changed the attitude to the use of standard methods that do not take into account the specifics of the functioning of companies, and requires the modernization of old and the introduction of new approaches to Due diligence audit methods.