Author Topic: Interesting Articles...  (Read 992566 times)

Offline churnbabychurn

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Re: Interesting Articles...
« Reply #5835 on: January 05, 2017, 10:37:15 PM »


I used to work for a company that was audited by one of the big 5 (back in the day).

I can tell you first hand that the auditors job is NOT  to look for, or detect fraud. An auditor sample checks reports, asking for backup information. Give them a 1000 page register with all invoices on the A/R and they will never notice if the bottom line on the report adds up to the details (as long as there are thousands of lines of details per customer).
One of the first thing auditors have to check off is mathematical accuracy of the reports. - not much fraud happening there anyway.
Valuation issues is where it happens much more often.



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Re: Interesting Articles...
« Reply #5836 on: January 05, 2017, 11:03:27 PM »
One of the first thing auditors have to check off is mathematical accuracy of the reports. - not much fraud happening there anyway.
Valuation issues is where it happens much more often.
I can only attest to the specific case I have seen with my own eyes.

Eventually company collapsed and owners served time behind bars. But for many years things went on with the auditors signing off.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline yuneeq

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Re: Interesting Articles...
« Reply #5837 on: January 06, 2017, 12:38:44 PM »
I know nothing about accounting, but what the heck is the point of an audit if it's not looking out for fraud?
Isn't an audit all about showing that investors can trust a company's numbers?

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Offline MarkS

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Re: Interesting Articles...
« Reply #5838 on: January 06, 2017, 12:52:58 PM »
I know nothing about accounting, but what the heck is the point of an audit if it's not looking out for fraud?
Isn't an audit all about showing that investors can trust a company's numbers?


The objective of an audit is to express an opinion that the financial statements are free of material misstatement. We do certain procedures to try to look for fraud but the main focus is on the financial accuracy of the financial data. If there is a large scale fraud it would be detected through the financial data. If there is a small scale fraud it is immaterial and who cares.

If a guy is stealing pencils from the stock room who cares. If a guy is stealing $1,000 from a $100,000 company who cares.

If there is a material fraud (something that investors would care about) it would most likely get caught through the financial data.

Offline churnbabychurn

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Re: Interesting Articles...
« Reply #5839 on: January 06, 2017, 03:33:21 PM »
I know nothing about accounting, but what the heck is the point of an audit if it's not looking out for fraud?
Isn't an audit all about showing that investors can trust a company's numbers?

The objective of an audit is to express an opinion that the financial statements are free of material misstatement. We do certain procedures to try to look for fraud but the main focus is on the financial accuracy of the financial data. If there is a large scale fraud it would be detected through the financial data. If there is a small scale fraud it is immaterial and who cares.

If a guy is stealing pencils from the stock room who cares. If a guy is stealing $1,000 from a $100,000 company who cares.

If there is a material fraud (something that investors would care about) it would most likely get caught through the financial data.
Auditors must document their discussions on assessment of fraud risk. Then they must document controls in place that address these risk assessments.
Auditors must be independent. And must utilize professional skepticism throughout the audit.
Auditors are trained to identify and address fraud risks etc etc.


Obviously it is at the core of the audit.

I think what @marks is saying, is that auditors do NOT guarantee the accuracy and freedom of fraud and error in the FS.  they merely express an opinion that they are reasonably sure, based on the procedures performed according to GAAS, that the financials prepared by management are good.....

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Offline churnbabychurn

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Re: Interesting Articles...
« Reply #5841 on: January 08, 2017, 10:51:38 AM »

Offline hvaces42

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Re: Interesting Articles...
« Reply #5842 on: January 08, 2017, 12:50:36 PM »
Fair warning - Any PMs sent in response to forum posts are fair game for ridicule in public.

Offline Dan

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Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline yuneeq

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Re: Interesting Articles...
« Reply #5844 on: January 09, 2017, 08:19:34 AM »
https://www.buzzfeed.com/davidmack/martin-shkreli-suspended-from-twitter
(Language)

Twitter once again acting out anytime a snowflake liberal is offended.
Millions of twitter profiles have pictures of celebrities as their profile pic and profess their love to them.

I didn't see anything that constitutes "harassment" at all.
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Offline Ergel

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Life isn't about checking the boxes. Nobody cares.

Offline JTZ

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Re: Interesting Articles...
« Reply #5846 on: January 09, 2017, 08:44:39 AM »
I didn't see anything that constitutes "harassment" at all.
How about a nutcase stalker?
"LESS IS MORE" It is the cumulative effect that kills deals!!! How many times do I have to say this?  >:(

Offline yuneeq

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Re: Interesting Articles...
« Reply #5847 on: January 09, 2017, 08:49:22 AM »
How about a nutcase stalker?

There's a very easy to find "block" button that she could've used.
Also it's not stalking when you follow a popular figure online. Or you're saying that we're all stalkers?
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Offline Ergel

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Re: Interesting Articles...
« Reply #5848 on: January 09, 2017, 08:51:42 AM »
How about a nutcase stalker?
+1
And it's different if you're some random nobody online vs. Martin Shrekli
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Offline JTZ

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Re: Interesting Articles...
« Reply #5849 on: January 09, 2017, 08:56:06 AM »
Or you're saying that we're all stalkers?
What I am saying he seems obsessed with her. That is not good.
"LESS IS MORE" It is the cumulative effect that kills deals!!! How many times do I have to say this?  >:(