Final answer:
The due diligence defense requires experts to thoroughly investigate financial statements and additional information to verify their accuracy, as highlighted by the Stapel fraud case where lack of due diligence led to oversight of statistical flaws.
Step-by-step explanation:
The due diligence defense requires that an expert prove that a reasonable investigation of the financial statements of the issuer and other information was conducted. In the context of research and financial reporting, due diligence is a critical process where researchers or experts verify the accuracy of information presented. The case of Stapel's fraud highlights the importance of due diligence; his co-authors failed to recognize statistical irregularities which indicated a lack of familiarity with basic statistics and an over-reliance on trust. This underscores the necessity for experts to conduct their own thorough analysis and validation of data statements rather than simply accepting them at face value.