The application of due diligence in the process of diagnosing the financial and legal position of business entities is a relatively new area of work for auditors. Here is more about it.
Prospects of Due Diligence application
The use of intangible assets in the course of economic activity, on the one hand, requires compliance with legal requirements for the protection of intellectual property rights, and on the other hand, can have a significant impact on financial results and overall financial condition of enterprises. Accordingly, it is extremely important in the process of risk mitigation to apply due diligence to intellectual property.
Due Diligence may be appropriate both in the acquisition of intellectual property, the implementation of mergers and acquisitions, the preparation of investment projects, and creating an effective system of management of intellectual assets of the entity.
Today the procedure can be carried out professionally and efficiently with the help of virtual data room. Because data integration technology is traditionally associated with the concept of data storage and is associated with the batch performance of operations to extract, convert and load data from different systems into a single data warehouse designed for processing and analysis of information (reporting). Data Room is a secure online cloud-based repository for corporate data exchange.
The main tasks of the Due Diligence procedure of intellectual property include:
- analysis and confirmation of the legality of ownership of trademarks, trademarks, works, inventions, software products, brand names, know-how, etc .;
- minimization of existing business risks of their operations (including the risk of loss of intellectual property or its depreciation);
- support for the formation or restructuring of intellectual property of the enterprise for future transactions or internal optimization;
- satisfaction of information needs and interests of the main participants of the agreement in case of transactions
- justification of the best price for the seller, confidence in the satisfactory condition of the acquired company for the investor (legality of property and non-property rights, no risks, conclusions about cooperation).
Virtual Data Room for successful Due Diligence
Electronic Data Room is a good alternative for business operations. Data integration of the software is implemented by a set of methods, architectural approaches, and software tools that provide consistent access and delivery of data for a variety of enterprise applications and business processes
For example, to ensure reliable protection of corporate information in virtual data room for today and in the near future, the most advanced and promising information security technologies must be implemented. They include:
- a comprehensive approach to the formation of information security, which provides a rational combination of technologies and means of information protection;
- use of secure VPN virtual networks to protect information transmitted over open communication channels;
- cryptographic transformation of data to ensure the integrity, validity, and confidentiality of information;
- use of firewalls to protect the corporate network from external threats when connecting to public networks;
- user-level access control and protection against unauthorized access to information;
- guaranteed identification of users through the use of tokens (smart cards, touch-memory, keys for USB-ports, etc.) and other means of authentication;
- support for public key management infrastructure;
- protection of information at the file level (by encrypting files and directories) to ensure its secure storage;
- protection against viruses with the use of specialized antiviral prevention and protection systems;
- Intrusion Detection technology and active research of information resources security;
- centralized management of information security tools;
- rapid adaptation of the created common information space to the inevitable changes in the purpose and composition of interacting organizational structures.