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>Auditing big firms is hard and to be honest, there's little general audits can do to detect fraud E&Y didn't verify cash balances at Wirecard for years, despi

>Auditing big firms is hard and to be honest, there's little general audits can do to detect fraud E&Y didn't verify cash balances at Wirecard for years, despite the fact there were whispers of fraud for years. Some fraud is hard; this kind is not "hard". https://www.ft.com/content/a9deb987-df70-4a72-bd41-47ed8942e83b https://www.ft.com/content/a9deb987-df70-4a72-bd41-47ed8942e...

mardifoufs 6y ago
Yes I completely agree... and I mentioned it in my comment! ;) When I said that auditing is hard, i meant that it's a painstaking process with a high employee turnover, isn't gratifying, at all and that doesn't and can't catch everything. In some cases, I truly don't blame auditors when very sophisticated fraudulent schemes fall apart since a part from the basic checks auditors are mostly there to verify the reported numbers match the internal numbers. If those internal numbers are fudged then there's little that can be done expect to some small degree with simple cross checks, of which even the simplest has not been done in this case. It takes minutes to ask for a bank to confirm statements. I literally can't see how this doesn't involve colluding with EY to cook the books.
- rojeee 6y ago
  Unfortunately, it actually takes _months_ to send bank confirmations and receive all the replies. Mad, I know but that’s the way it worked when I used to do it. The process involves sending snail mail to the banks who take ages to respond with the confirm response. Especially so because all auditors are sending them at the same time because it’s year end. There are some web platforms to help speed things up but most were and maybe still are rubbish.
  - luckylion 6y ago
    But it's not months of work, it's months of doing other things and going through the checklist every few weeks to see what's missing and then calling them again or writing another letter.

mardifoufs 6y ago

Yes I completely agree... and I mentioned it in my comment! ;) When I said that auditing is hard, i meant that it's a painstaking process with a high employee turnover, isn't gratifying, at all and that doesn't and can't catch everything. In some cases, I truly don't blame auditors when very sophisticated fraudulent schemes fall apart since a part from the basic checks auditors are mostly there to verify the reported numbers match the internal numbers. If those internal numbers are fudged then there's little that can be done expect to some small degree with simple cross checks, of which even the simplest has not been done in this case. It takes minutes to ask for a bank to confirm statements. I literally can't see how this doesn't involve colluding with EY to cook the books.

rojeee 6y ago
Unfortunately, it actually takes _months_ to send bank confirmations and receive all the replies. Mad, I know but that’s the way it worked when I used to do it. The process involves sending snail mail to the banks who take ages to respond with the confirm response. Especially so because all auditors are sending them at the same time because it’s year end. There are some web platforms to help speed things up but most were and maybe still are rubbish.
- luckylion 6y ago
  But it's not months of work, it's months of doing other things and going through the checklist every few weeks to see what's missing and then calling them again or writing another letter.