In this context due diligence is not a transaction's document request. It is the work behind a figure that has already been filed: where it came from, what was done to it, who checked it, and whether any of that can still be produced when somebody asks eighteen months later. The distinction matters because the two meanings share a phrase and need completely different things kept.
What has to be kept for each figure
The source extract as it was on the day, the mapping or calculation applied, any manual adjustment with its reason, the validation output, and the name of whoever reviewed it. Five things, none of them hard to capture at the time and all of them close to impossible to reconstruct afterwards. Manual adjustments are the ones worth being strictest about, because they are exactly what gets asked about and exactly what nobody wrote a reason for.
Why the day matters
Source systems keep changing after a period closes: a correction is posted, a record is reclassified, a customer is merged. A figure that was right when filed will not reproduce from live data a year later, and being unable to reproduce it looks exactly like having got it wrong. Keeping the extract as it stood is what makes the difference explainable, and it is the single cheapest thing on this page.
How long it has to survive
Long enough for the examination cycle that will ask about it, which is usually longer than anybody's default retention. Set it deliberately, write it into the retention schedule alongside the return itself, and remember that the evidence and the return have to be kept for the same period. Keeping the filing and discarding the working is a common arrangement and a useless one.
The checklist, and what it is for
A short list per return, worked as the return is prepared rather than after: is the extract stored, is the mapping version recorded, is every adjustment explained, has a second person read it, is the receipt filed. Five ticks. Its value is not thoroughness, it is that it happens at the only moment when all five are cheap.
Questions people ask about regulatory due diligence
Is this the same as M&A due diligence?
No, and the phrase collides. That is a transaction's document request list. This is the evidence behind a figure in a periodic return.
How long should the working papers be kept?
At least as long as the return they support, set explicitly in the retention schedule. Defaults are usually shorter than the examination cycle.
What is most often missing?
The reason for a manual adjustment. The adjustment is recorded, the reason is in somebody's head, and the person has moved on.