An underwriter is establishing its due diligence defense for a $300 million IPO. Which of the following steps would NOT typically be part of the due diligence process?

Why C — Independently auditing the company's financial statements in addition to the external auditor's audit

While underwriters must conduct a thorough investigation, they are entitled to rely on the work of experts (such as the independent auditor) for 'expertised' portions of the registration statement, including the audited financial statements. The underwriter is not expected to independently re-audit the financial statements. The due diligence standard for expertised portions is that the underwriter had no reasonable ground to believe the expertised statements were untrue. For non-expertised portions, the underwriter must conduct its own reasonable investigation, including document review, management interviews, and obtaining comfort letters.