The Illusion of Objectivity: How Deal Incentives Skew Due Diligence Outcomes

This article critically examines the inherent biases within the due diligence process, particularly in mergers and acquisitions. It argues that due diligence, while ostensibly designed to uncover problems, often serves to validate pre-existing decisions due to the strong incentives of all parties involved to close the deal. Internal audit and assurance professionals should be aware of these structural limitations and the potential for scope manipulation, as they can significantly impact the reliability of due diligence findings and the overall risk profile of a transaction.