A Justice Department policy shift around the disclosure of possible wrongdoing uncovered in mergers and acquisitions reinforces the need for buyers to dive deep into a target’s compliance efforts, both before and after a deal closes, corporate advisers said.

Under a new policy announced in October, an acquiring company that discloses potential wrongdoing at a company being acquired within six months of either side of the deal closing date—and fully cooperates and fixes the underlying problems within a year of closing—can presume it won’t be prosecuted by the Justice Department. READ MORE