Audit firms should have only investigated companies they did not audit, but I suspect this independence conflict was ignored given the number of investigations and the shortage of accounting firms that knew how the programs worked.
Fogel again stated that the plaintiffs had not pled facts supporting a strong inference of knowledge or recklessness on the auditor’s part.
“The allegations against PWC amount to a series of allegations about improprieties at Mercury and a conjecture that PWC must have known about it,” Fogel said.
“Why I Did Not Go To Jail” Michelle (note: her name has been changed) comprehensively understood software accounting, business models, and best practices, and she was beloved by Wall Street in no small part due to her honest and straightforward reporting of her previous company’s business.
In my reference checking, at least a dozen investors told me that they made far more money when the numbers disappointed than when the company outperformed, because they trusted Michelle when she said that things were not worse than they appeared and bought on the dips.
How did Horowitz, according to his account, avoid jail?