The audit profession has gotten a complete pass on its role in the financial crisis. How could companies have constructed such fragile (fraudulent) balance sheets without the auditors sending up warning flags?
A few years ago I was involved in a matter where a company's bank statements showed five times the turnover that the financial statements did. The Big Four auditor had never even questioned what turned out to be a multi-million dollar fraud.
Okay I might be a little pessimistic on human nature, but what, ultimately, any "ethics" stands on is responsibility.
Auditor, as of now, are waived of it. Ultimately.
Doubt there's any argument in that if we stop persecution of frauds, robberies or you-name-it crime, no matter how unhumane it is, it will rise. Worse yet, if no counteraction follows, it will keep rising.
Now when was the last time auditors were held responsible for their "audits" not providing the "independent verification guarantee" it should?
The content contained in this blog represents the opinions of Mr. Hempton. You should assume Mr. Hempton and his affiliates have positions in the securities discussed in this blog, and such beneficial ownership can create a conflict of interest regarding the objectivity of this blog. Statements in the blog are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. Certain information in this blog concerning economic trends and performance is based on or derived from information provided by third-party sources. Mr. Hempton does not guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Such information may change after it is posted and Mr. Hempton is not obligated to, and may not, update it. The commentary in this blog in no way constitutes a solicitation of business, an offer of a security or a solicitation to purchase a security, or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.
5 comments:
"Does Ethics Training Change Behaviour?"
Francine could have phoned this in:
'No'. But prosecuting CXO's does!
The audit profession has gotten a complete pass on its role in the financial crisis. How could companies have constructed such fragile (fraudulent) balance sheets without the auditors sending up warning flags?
A few years ago I was involved in a matter where a company's bank statements showed five times the turnover that the financial statements did. The Big Four auditor had never even questioned what turned out to be a multi-million dollar fraud.
'No matter how cynical you get, its never enough' Lily Tomlin
http://www.smh.com.au/national/big-business-in-charge-of-own-tax-20140115-30vat.html#ixzz2qUwk2b14
I was ready to do that debate with a patch over one eye, one hand tied behind my back and a shoe on my head. Easy peezy. :)
Okay I might be a little pessimistic on human nature, but what, ultimately, any "ethics" stands on is responsibility.
Auditor, as of now, are waived of it. Ultimately.
Doubt there's any argument in that if we stop persecution of frauds, robberies or you-name-it crime, no matter how unhumane it is, it will rise.
Worse yet, if no counteraction follows, it will keep rising.
Now when was the last time auditors were held responsible for their "audits" not providing the "independent verification guarantee" it should?
Regards,
Dmitry.
Post a Comment