How many people does it take to spot accounting improprieties?

I am watching with interest the HP vs Autonomy claims and counter-claims but I can’t help asking myself….where was the due diligence?

When CA bought Nimsoft, from what I remember there were nearly 200 CA users on the data room, which included CA employees, 3rd party accountants, lawyers etc. and that was for a $350m purchase price. I am pretty sure that they knew every dollar on the P&L by the time dd was done.

I am wondering how many people HP had on the due diligence team for a $11bn purchase and how they did not spot the alleged accounting issues.

Now, I remember someone telling me that when you buy a publicly traded company then you don’t have to do as much due diligence around the accounts because they are fully audited and have to conform to public regulations and standards but, even so.

Anyhow, it will all come out over time, will be interesting to understand what happened.

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