4 ms·

> Thing is, the proof EY got from Wirecard was good enough to meet these thresholds It objectively wasn't. I've never heard of a case where the auditor doesn't

by omega3 3y ago

> Thing is, the proof EY got from Wirecard was good enough to meet these thresholds It objectively wasn't. I've never heard of a case where the auditor doesn't independently verify the bank account balance with the bank itself. More reliable evidence reduces the need for additional corroborating evidence. In general the evidence obtained from the company itself wouldn't be considered reliable by itself. https://www.ft.com/content/db9fa3d7-11da-476e-beea-d5ed0ad137ed https://www.ft.com/content/db9fa3d7-11da-476e-beea-d5ed0ad13... This wasn't some hard to uncover marvel of accounting fraud using complex financial engineering.

hef19898 3y ago
Always happy to be corrwcted and learn something new, unfortunately the FT link is behind a paywall... If memory serves well so, it is quite a while I read Dan McCrum's book, Wirecard produced documents from the Asian banks (fake ones, as we now know). Of course, and I couldn't agree more, they should have at least called the banks up. Especially since a German fin-tech start-up, with on-going bad press, claims to hold billions with some Asian banks from business activities directly related to said accussations circulating in the press. EY deserves all the flak it got. That being said, again, if a company wants to defraud its auditors, they can for surprisingly long periods if they try hard enough. I think, we basically agree.
- ArnoVW 3y ago
  From what I gather they not only called the bank, but actually went to a branch in the Philippines. They spoke to a clerk, took a picture of a screen showing a balance. But the branch office was fake. https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e9b7 https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e...
naasking 3y ago
> I've never heard of a case where the auditor doesn't independently verify the bank account balance with the bank itself Didn't they setup a whole fake bank branch? Sufficiently motivated actors can circumvent any preventative measures.

by omega3 3y ago

hef19898 3y ago

Always happy to be corrwcted and learn something new, unfortunately the FT link is behind a paywall... If memory serves well so, it is quite a while I read Dan McCrum's book, Wirecard produced documents from the Asian banks (fake ones, as we now know). Of course, and I couldn't agree more, they should have at least called the banks up. Especially since a German fin-tech start-up, with on-going bad press, claims to hold billions with some Asian banks from business activities directly related to said accussations circulating in the press. EY deserves all the flak it got. That being said, again, if a company wants to defraud its auditors, they can for surprisingly long periods if they try hard enough. I think, we basically agree.

ArnoVW 3y ago
From what I gather they not only called the bank, but actually went to a branch in the Philippines. They spoke to a clerk, took a picture of a screen showing a balance. But the branch office was fake. https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e9b7 https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e...

naasking 3y ago

> I've never heard of a case where the auditor doesn't independently verify the bank account balance with the bank itself Didn't they setup a whole fake bank branch? Sufficiently motivated actors can circumvent any preventative measures.