EY gets banned from new audit business in Germany

Post by puppymaster » Sun, Apr 09, 2023, 2:53 PM UTC

noisy_boy wrote: post #47

crazygringo wrote: post #31

> Auditors insist that their services cannot be treated as a guarantee that accounts are truthful, and note that sophisticated frauds are by their nature difficult to spot. As someone who knows nothing about this area, I don't understand why audits won't always detect fraud. I would naively assume that auditors have access to all financial accounts and records of cash flows and they make sure they all add up and are…

Just because you have access to the entire source code of Linux kernel, doesn't mean you'll be able to find all the bugs in it. Sometimes the numbers may add-up but it is the patterns which may be suspicious. Automation like sanity checks/pattern matching etc (+ ML now a days) would help a great deal but even then it is not a guarantee.

Post by badpun » Sun, Apr 09, 2023, 2:53 PM UTC

mostlystatic wrote: post #45

crazygringo wrote: post #31

> Auditors insist that their services cannot be treated as a guarantee that accounts are truthful, and note that sophisticated frauds are by their nature difficult to spot. As someone who knows nothing about this area, I don't understand why audits won't always detect fraud. I would naively assume that auditors have access to all financial accounts and records of cash flows and they make sure they all add up and are…

Don't know much either, but I found this Money Stuff story interesting: https://www.bloomberg.com/opinion/articles/2023-01-04/privat... Someone was CFO at two companies and the auditors only checked the year end balance against his falsified statements. So he transferred money from the other company temporarily to make them match. """To avoid detection, Morgenthau doctored African Gold’s monthly bank statements by, f…

Post by AndrewKemendo » Sun, Apr 09, 2023, 2:57 PM UTC

electroly wrote: post #46

crazygringo wrote: post #31

> Auditors insist that their services cannot be treated as a guarantee that accounts are truthful, and note that sophisticated frauds are by their nature difficult to spot. As someone who knows nothing about this area, I don't understand why audits won't always detect fraud. I would naively assume that auditors have access to all financial accounts and records of cash flows and they make sure they all add up and are…

> Or can the numbers all add up but there's still fraud? Yes, of course. Consider that you've set up a separate company and you intend to steal money from your employer. You've got a buddy in accounts payable that you're in cahoots with. You get set up as a vendor, you send invoices to the company, they pay them, and you never deliver anything. The company's numbers add up. They pay vendors for services all the time.…

Post by Jcampuzano2 » Sun, Apr 09, 2023, 3:04 PM UTC

throwaway18875 wrote: post #15

rvba wrote: post #8

Audits in general are such a joke. Rubber stamping and checks done by students or graduates who barely understand what they are doing. And even if they detect something, it is considered as not material and ignored. From business perspective the auditors are clueless. I dont claim that audits are bad, they are very needed. But the execution in many ways is so poor.

I once worked at a small pen-testing firm that also conducted PCI DSS compliance tests, and I can confirm that this is an accurate depiction of the industry. A majority of the staff were recent grads, and it was disheartening to see that most clients were primarily interested in obtaining the compliance certification rather than genuinely improving their product security. This, in turn, creates a perverse incentive f…

Post by EarthIsHome » Sun, Apr 09, 2023, 3:08 PM UTC