tag:blogger.com,1999:blog-4815867514277794362.post7539832846970879014..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Auditors - a follow up...John Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4815867514277794362.post-60544915941692522292009-01-10T04:56:00.000+11:002009-01-10T04:56:00.000+11:00To xtra I say, no people will not come to the real...To xtra I say, no people will not come to the realization of anything. Questioning the norm requires soul courage and most are not designed for that. <BR/><BR/>As for Audit firms not being designed to detect fraud, my question is...WHY NOT? Sounds like they're not cheap anyways. By the way, there is something called Forensic Accounting and when you're auditing billions of dollars at stake why cut corners? Why can fraud detection not be an essential part of any audit for a firm the size of Satyam.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-86144665114171307362009-01-09T05:16:00.000+11:002009-01-09T05:16:00.000+11:00I have no doubt that your commenters are right tha...I have no doubt that your commenters are right that hiring a big four company is something of a marketing ploy. It conveys that your books are legit. Anyhow, that is how it would seem to work in the very near term. But the big four have been mucking up tremendously over the years, and as you have pointed out they aren't terribly competent and are terribly expensive. Others must be making this observation as well. At some point in the near future, I would think a sizable number of people would come to that realization as well. Certainly the Madoff deal will expedite the process.xtrahttps://www.blogger.com/profile/12900358822347362833noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-12110342667555783572009-01-08T23:41:00.000+11:002009-01-08T23:41:00.000+11:00A few points:1. Audits are not designed to detect ...A few points:<BR/><BR/>1. Audits are not designed to detect fraud.<BR/><BR/>2. Your local firm may also not have spotted the fraud.<BR/><BR/>3. Big 4 means big pockets when it comes to suing for compensationAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-66332736056426920382009-01-08T23:26:00.000+11:002009-01-08T23:26:00.000+11:00I used to be a partner at a small HF, London-based...I used to be a partner at a small HF, London-based. And I really like your blog. <BR/>We faced the same issue - which auditor to use. We went w/ a big 4 firm. Just to get around the issue w/ potential clients of "who's THAT?" and "why didn't you use a REAL firm?" You get 30 min to pitch your fund - you don't spend ANY of it on who's your auditor. <BR/>You're correct that a smaller firm WILL do a better audit, but marketing the fund is more important than a better audit. <BR/>If you want to move into the mainstream of funds, go w/ the big 4. Your foundation investors may not WANT you to go more mainstream & they may want a better audit, but think about YOUR business first.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-33174874801236182522009-01-08T22:57:00.000+11:002009-01-08T22:57:00.000+11:00I guess the marketing thing comes down to "who has...I guess the marketing thing comes down to "who has the biggest pockets/liability insurance when things go wrong"? <BR/> <BR/>I wouldn't want to be an Indian PWC partner right now...Anonymousnoreply@blogger.com