A diligence report is a decision document, and its structure should follow what the client must decide.
Executive summary first. The material findings, each with the exposure, the probability, and the recommendation — proceed, price, indemnify, condition, or walk. One page.
Materiality threshold agreed with the client in advance and stated. Reports that record every finding without ranking them are unusable.
Findings. For each: what was reviewed, what was found, why it matters, the quantified or estimated exposure, and the recommended treatment in the agreement.
Unresolved items. What could not be verified, what was not provided, and what would be needed. This section is what protects both the client and counsel.
Scope statement. What was reviewed and what was not, the period covered, the materiality threshold, and reliance limitations.
Link to the agreement. Each material finding mapped to a representation, a disclosure schedule item, a specific indemnity, a closing condition, or a price adjustment. A report that does not connect to the document leaves the work unused.
Format. A findings table with severity ratings, supported by narrative for the significant items, rather than a chronological account of the review.