Quick Answer
Vendor-selection due diligence is the evaluation a firm performs when selecting a vendor. The trigger is the vendor-selection decision itself. On the exam, tie the analysis to evaluating that vendor choice, rather than replacing it with a different relationships-and-dealings topic or a later stage of the relationship.
Vendor selection comes first: the firm evaluates the vendor as part of making the selection decision.
Due Diligence at Selection
- Due diligence: The evaluation required for vendor selection in this outline topic.
- Vendor selection: A relationships-and-dealings activity that requires due diligence.
- Vendor-selection decision -> due-diligence evaluation.
| Fact pattern focus | Correct connection |
|---|---|
| Choosing a vendor | Due diligence for vendor selection |
| A different relationship or dealing | Do not substitute it for the vendor-selection analysis |
Exam Tip: Gotchas
Vendor selection is the stated trigger. Keep the due-diligence analysis tied to selecting the vendor rather than substituting a different relationships-and-dealings topic.