Evidence standard · On both sides
Screening, review, audit and due diligence are not the same thing
Published · Reviewed by The Diligence Standard Team · Updated
Screening filters information under stated rules. A review or audit has a defined professional scope. Acquisition due diligence tests transaction-specific claims for a buyer or seller. The labels should not be used interchangeably.
A realistic transaction story
A marketplace said it had verified revenue, and the seller’s accountant had reviewed annual statements. The buyer assumed this covered normalized earnings. Neither process had tested owner add-backs, customer concentration or post-close staffing.
What the evidence changed
Each form of work supported part of the picture but answered a different question.
What to check
- Write down the exact claim and who supplied it.
- Ask what was independently tested, by whom and under what scope.
- Ask for the purpose, standard, records tested, period covered, reliance rights and explicit exclusions of every review.
- Translate any unresolved gap into cash, price, terms, timing or a decision not to proceed.