A. A due diligence engagement is an investigative analysis of the financial and operating activities of an entity in connection with a proposed major transaction, such as a business combination. A due diligence engagement includes review of the company's strategic overview, business overview, accounting and information systems, sales, risk management, tax issues, and any other matters of importance in determining whether there is justification for the transaction.

B. An operational audit of a division of an organization to determine if divisional management is complying with laws and regulations is not a due diligence review.

C. A review of interim financial statements as directed by an underwriting firm is not a due diligence review.

D. A review of operations as requested by the audit committee to determine whether the operations comply with audit committee and organizational policies is not a due diligence review.