> 5. Audit has some explaining todo. Yes, that's a total fuck up on their side as well. That an incompetent company dies while doing stupid stunts like that is understandable and how the market filters out stupidity. That another company looks at it and thinks "Oh that looks fine", that's a total failure at their work.
What "audit" are we talking about here, though?
Usually when you acquire a company you sign of some intent lettet that shows you are serious about the purchase provided they can pass your smell test.
Then after NDA's and a few other docs if a company accepts being purchased they have to give access to their internal docs. Finance books, IT, etc.
If during this "due diligence" period the buyers find a major red flag they might pull out, revise the price down, etc.