ST: Fraud: Hold external auditors accountable

[cherry6]

STforum: Fraud: Hold external auditors accountable

Perhaps govt should hire more detectives (CAD) to arrest corrupt board directors and their colluding auditors since these 'paid' auditors have the tendency to do a slip shod job (high leniency for errors= happier clients).

Perhaps for all charities, with increasing frequency/ intensity in proportion to increased $ pool, should publish their audited financial statements for public scrutiny (on the internet for large charities and public listed companies (PLC))- this would assist potential whistle blowers and complaints to the CAD regarding dogy charity organisation submissions.

For a large project such as the CHC building fund (worth $310Million), I cannot understand why the Church cannot publish complete updated accounts of the process on a monthly interval- for the sake of transparency and public scrutiny of charity/ PLC accounts- especially ones with so many members/ shareholders and whose impact upon society can be expected to be many times their membership/ share holder size.

Perhaps the government could provide charities with the necessary computer accounting software so that with the press of a button, updated accounts may be posted online (and emailed to MAS/COC etc) at the click of a mouse/ button.
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The Straits Times; Published on Jul 19, 2012
Fraud: Hold external auditors accountable
IN LAST Saturday's special feature ('Accounting for spiritual giving'), which highlighted the checks in place for donations for religious purposes ('Religion and the rules of charity'), there was no mention about the role of external auditors.
Are external auditors taken to task in investigations into fraud or financial malfeasance?
If external auditors are paid to audit accounts, surely theirs is a role that must also be scrutinised.
Similarly, rating agencies were not taken to task for gross negligence in rating toxic sub-prime assets as AAA investment grade, resulting in a chain of events that led to the Lehman Brothers collapse and financial crisis, and retail investors losing billions.
They were the catalysts to the financial collapse as the investing public took their ratings in good faith.
What is the view of the relevant agencies?
Yeow Hwee Ming
Fraud: Hold external auditors accountable

 

[Jarlaxle]

http://forums.hardwarezone.com.sg/current-affairs-lounge-17/what-auditors-2995099.html

refer to my earlier thread.

auditing firms have serious conflict of interest.

 

[Novicelim]

Perhaps govt should hire more detectives (CAD) to arrest corrupt board directors and their colluding auditors since these 'paid' auditors have the tendency to do a slip shod job (high leniency for errors= happier clients)..........

=============
The Straits Times; Published on Jul 19, 2012
Fraud: Hold external auditors accountable
IN LAST Saturday's special feature ........no mention about the role of external auditors. Are external auditors taken to task in investigations into fraud or financial malfeasance?
If external auditors are paid to audit accounts, surely theirs is a role that must also be scrutinised.....

Similarly, rating agencies were not taken to task for gross negligence in rating toxic sub-prime assets as AAA investment grade, resulting in a chain of events that led to the Lehman Brothers collapse and financial crisis, and retail investors losing billions...

They were the catalysts to the financial collapse as the investing public took their ratings in good faith.
What is the view of the relevant agencies?
Yeow Hwee Ming
Fraud: Hold external auditors accountable

I thought account auditor job is to audit the account, their task is to ensure that the account tally, or balance sheet really balanced, and cash flow, and expenses and liability are accounted for, accordingly. They are not investigator or analyst. They do not dig into the details of project viability, which is CEO or company management job.

As for rating agency, how everyone wish that they are taken to task, but thought it will only be possible if one is able to prove that they conspired with the company to paint a false picture of good financial health when the company is actually a bleeding hollow shell. If it is possible to hold such agency accountable, then we can gather all investors who had depreciated stcoks to hold class action against whichever 'suay' analyst who predicted an up treand for their depreciated portfolio..

Anyway, these are rich men games, money may be the root of all evils, but its power and influence can never be over estimated.

 

[Jarlaxle]

I thought account auditor job is to audit the account, their task is to ensure that the account tally, or balance sheet really balanced, and cash flow, and expenses and liability are accounted for, accordingly. They are not investigator or analyst. They do not dig into the details of project viability, which is CEO or company management job.

As for rating agency, how everyone wish that they are taken to task, but thought it will only be possible if one is able to prove that they conspired with the company to paint a false picture of good financial health when the company is actually a bleeding hollow shell. If it is possible to hold such agency accountable, then we can gather all investors who had depreciated stcoks to hold class action against whichever 'suay' analyst who predicted an up treand for their depreciated portfolio..

Anyway, these are rich men games, money may be the root of all evils, but its power and influence can never be over estimated.

yup
so we should not kaopei government auditors or AGO.

they can audit accounts + catch frauds.
WINWIN

 

[Novicelim]

yup
so we should not kaopei government auditors or AGO.

they can audit accounts + catch frauds.
WINWIN

thought they audit account + detect discrepancies, fraud or 'honest accounting error' their paymaster would be informed, or if there is report of suspicion of criminal breach, CAD will investigate and court will decide.

 

[ponpokku]

yup
so we should not kaopei government auditors or AGO.

they can audit accounts + catch frauds.
WINWIN

told u the other time liao, u give the accountants the policing rights lor. let them be the detectives, let them have the authority to catch and report discrepancy. can?

they are just there to audit whatever info that was given to them by their clients, they DO NOT have authority to poke their nose into anything their client didnt want to disclose, so how are u gonna blame them?

when the clients gave the auditors incomplete/false accounts and as a result the auditors arrived at wrong conclusions, should u blame the auditors or the clients?

 

[Jarlaxle]

told u the other time liao, u give the accountants the policing rights lor. let them be the detectives, let them have the authority to catch and report discrepancy. can?

they are just there to audit whatever info that was given to them by their clients, they DO NOT have authority to poke their nose into anything their client didnt want to disclose, so how are u gonna blame them?

when the clients gave the auditors incomplete/false accounts and as a result the auditors arrived at wrong conclusions, should u blame the auditors or the clients?

if they encountered something fraudulent or suspicious.
the auditors can withdraw to be the auditors wat.
not that it has not been done b4 lol
(i see them doing it a lot of times for S-chips HAHAHA)

by keeping silence, it is assisting in the crime.

 

[ponpokku]

if they encountered something fraudulent or suspicious.
the auditors can withdraw to be the auditors wat.
not that it has not been done b4 lol
(i see them doing it a lot of times for S-chips HAHAHA)

by keeping silence, it is assisting in the crime.

plz lah, they oso salaryman. the boss give them this client, they can reject meh? how many willing to argue with the boss or clients and lose their job over such things? u must be practical mah.

u didnt give them any guarantee regarding their job security, yet want them to play righteousness and vigilante, or else, blame them for any discrepancies, u think fair or not? who wants to be accountants if it's like that? in the end instead of an slightly inaccurate accts(within margin) u got no accts at all, which is the greater evil?

 

[cherry6]

HOLDING EXTERNAL AUDITORS ACCOUNTABLE

The Straits Times; Published on Jul 19, 2012
Fraud: Hold external auditors accountable
IN LAST Saturday's special feature ('Accounting for spiritual giving'), which highlighted the checks in place for donations for religious purposes ('Religion and the rules of charity'), there was no mention about the role of external auditors.
Are external auditors taken to task in investigations into fraud or financial malfeasance?
If external auditors are paid to audit accounts, surely theirs is a role that must also be scrutinised.
Similarly, rating agencies were not taken to task for gross negligence in rating toxic sub-prime assets as AAA investment grade, resulting in a chain of events that led to the Lehman Brothers collapse and financial crisis, and retail investors losing billions.
They were the catalysts to the financial collapse as the investing public took their ratings in good faith.
What is the view of the relevant agencies?
Yeow Hwee Ming
Fraud: Hold external auditors accountable

The Straits Times; Published on Jul 23, 2012
HOLDING EXTERNAL AUDITORS ACCOUNTABLE
Action will be taken if...
MR YEOW Hwee Ming asked if external auditors are taken to task in investigations into fraud or financial malfeasance ('Fraud: Hold external auditors accountable'; last Thursday).
External auditors of business entities incorporated in Singapore must be public accountants registered with the Accounting and Corporate Regulatory Authority (Acra) and subject to its oversight under the Accountants Act.
Acra's regulatory oversight includes a regular inspection programme during which it inspects samples of public accountants' audit work to see whether they have complied with the Singapore Standards on Auditing, which are based on rigorous international standards.
Despite the best auditing practices, financial anomalies can still occur and can be very difficult to detect. However, if Acra finds that an auditor has not complied with the standards or not performed his duty with due care, it will take appropriate action, which could include disciplinary or prosecution proceedings.
Ang Siok Hui (Ms)
Head, Corporate Communications Division, Accounting and Corporate Regulatory Authority
Action will be taken if...
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The Straits Times; Published on Jul 23, 2012
HOLDING EXTERNAL AUDITORS ACCOUNTABLE
It's about offering an opinion, not exposing fraud
WE NOTE Mr Yeow Hwee Ming's concerns ('Fraud: Hold external auditors accountable'; last Thursday).
As the national accountancy body, we will not hesitate to take to task members who fail to discharge their professional duties responsibly.
We have a rigorous disciplinary mechanism in place, which includes striking members off our register, which will result in the revocation of their licence to practise.
However, according to local and international standards, the primary responsibility for fraud prevention and detection lies with those charged with governance and the management.
The responsibility of the external auditor is to obtain reasonable assurance that the financial statements taken as a whole are free from material mis-statement, whether caused by fraud or error.
Nevertheless, the external auditor is required to exercise professional scepticism and due care during an audit.
An external audit is only for the purpose of expressing an opinion on whether the financial statements are prepared and presented fairly in accordance with a specified accounting framework and relevant laws.
It is not for the purpose of detecting or uncovering fraud, which requires fraud investigation or forensic work.
Goh Puay Cheh (Ms)
CPA Singapore
Chief Operating Officer
Institute of Certified Public Accountants of Singapore
It's about offering an opinion, not exposing fraud

 

[Jarlaxle]

plz lah, they oso salaryman. the boss give them this client, they can reject meh? how many willing to argue with the boss or clients and lose their job over such things? u must be practical mah.

u didnt give them any guarantee regarding their job security, yet want them to play righteousness and vigilante, or else, blame them for any discrepancies, u think fair or not? who wants to be accountants if it's like that? in the end instead of an slightly inaccurate accts(within margin) u got no accts at all, which is the greater evil?

for police/nurse/doctor/soldiers/politicians

plz lah, they oso salaryman. the boss give them this criminal/patient/electorate, they can reject meh? how many willing to argue with the boss or electorate and lose their job over such things? u must be practical mah.

u didnt give them any guarantee regarding their job security, yet want them to risk their life to combat criminals or enemy or infectious patients or wrath of electorate else blame them for any discrepancies, u think fair or not?
who wants to be police/nurse/doctor/soldiers/politicians if it's like that? in the end instead of an slightly poor treatment, crime fighting or policies, u got no treatment, crime fighting or policies,
whici is the greater evil?

 

[sunzoner]

for police/nurse/doctor/soldiers/politicians

plz lah, they oso salaryman. the boss give them this criminal/patient/electorate, they can reject meh? how many willing to argue with the boss or electorate and lose their job over such things? u must be practical mah.

u didnt give them any guarantee regarding their job security, yet want them to risk their life to combat criminals or enemy or infectious patients or wrath of electorate else blame them for any discrepancies, u think fair or not?
who wants to be police/nurse/doctor/soldiers/politicians if it's like that? in the end instead of an slightly poor treatment, crime fighting or policies, u got no treatment, crime fighting or policies,
whici is the greater evil?

Reading the above, i get confused. then I realise, it could be the lack of proper quotes...

who wants to be police/nurse/doctor/soldiers/politicians if it's like that? in the end instead of an slightly poor treatment, crime fighting or policies, u got no treatment, crime fighting or policies,
whici is the greater evil?

Why talk about greater evil? comparing flawed bad alternatives?

The fact of the matter is auditors are given mandates by their clients. They are to work within a small box. They are not allowed to think out of this box.

 

[Jarlaxle]

Reading the above, i get confused. then I realise, it could be the lack of proper quotes...



Why talk about greater evil? comparing flawed bad alternatives?

The fact of the matter is auditors are given mandates by their clients. They are to work within a small box. They are not allowed to think out of this box.

doctors/nurses are given mandates by their patients. they are to work within a smaller box becoz anything out of the box will require yrs of lab and clinical testings.

politicians are given mandates by their electorate. they are to work within a small box (defined constitution) becoz anything out of the box will require you to change the law or violate the law. (potentially means jail or fine)

policemen are given mandates by their bosses. they are to work within a small box too. (do and don't as dictated by the Enforcement Act) becoz anything out of the box will mean discharge of duty (remember the policeman in charge of the suntec brawl? ) becoz anything out of the box will subject the policemen to jail time/fine/discharge of duty.

can go on forever for ppl who work with compliance/regulation issues lah.

 

[ponpokku]

for police/nurse/doctor/soldiers/politicians

plz lah, they oso salaryman. the boss give them this criminal/patient/electorate, they can reject meh? how many willing to argue with the boss or electorate and lose their job over such things? u must be practical mah.

u didnt give them any guarantee regarding their job security, yet want them to risk their life to combat criminals or enemy or infectious patients or wrath of electorate else blame them for any discrepancies, u think fair or not?
who wants to be police/nurse/doctor/soldiers/politicians if it's like that? in the end instead of an slightly poor treatment, crime fighting or policies, u got no treatment, crime fighting or policies,
whici is the greater evil?

wah lan u dunno what is civil servants or public service? u dunno what is 'job scope'? hello~? the accountants are unfortunately not in such categories, and it is not within their job scope to investigate and penalise their clients. unless of cos, they are hired by the police to investigate on suspected frauds. then they have the authority.

it is within the job scope for police to catch criminals or soldiers to defend their country, by law. even if that means laying down their life for it. they signed for it. it is within the job scope of doctors and nurses to save ppl, by law, they took an oath and abide the medical ethics. u try ask the police or soldiers to shoot civilians, or ask nurses and doctors to kill patients en-masse, see they agree with u or not?

now what laws, job scope, authority, powers, said the accountants must investigate their clients and penalise them? well?

one hand u expect police, soldiers, nurses and doctors to fulfill their job scope, within the limitations of the law, on the other hand u expect accountants to work beyond thier job scope, beyond the limits of the law? u sure u are rationale enuff to discuss such issues?

 

[ponpokku]

doctors/nurses are given mandates by their patients. they are to work within a smaller box becoz anything out of the box will require yrs of lab and clinical testings.

politicians are given mandates by their electorate. they are to work within a small box (defined constitution) becoz anything out of the box will require you to change the law or violate the law. (potentially means jail or fine)

policemen are given mandates by their bosses. they are to work within a small box too. (do and don't as dictated by the Enforcement Act) becoz anything out of the box will mean discharge of duty (remember the policeman in charge of the suntec brawl? ) becoz anything out of the box will subject the policemen to jail time/fine/discharge of duty.

can go on forever for ppl who work with compliance/regulation issues lah.

u even brought the law and constitution issue out, now back to ur question, what laws or constitution states that the accountants have to poke their noses into the clients? or else u can penalise them for not doing so?

if u want to talk about laws, i can tell u at least 2 things,

protection of personal liberties and properties.
innocent unless proven guilty.

with these 2 basic rules u cannot ask the accountants to do more than his job scope or else it is trespassing basic human rights. u can only check on the guy AFTER u have evidence he is commiting/has commited a crime, or enuff evidences to justify a check on him. but not the other way round, decides he's a criminal first then check on him to prove it.

what u are suggesting now is to ask the accountants to treat every client as a potential criminal and then spy on their assets and numbers. u sure u got it the right way?

 

[alvinaloy]

wah lan u dunno what is civil servants or public service? u dunno what is 'job scope'? hello~? the accountants are unfortunately not in such categories, and it is not within their job scope to investigate and penalise their clients. unless of cos, they are hired by the police to investigate on suspected frauds. then they have the authority.

it is within the job scope for police to catch criminals or soldiers to defend their country, by law. even if that means laying down their life for it. they signed for it. it is within the job scope of doctors and nurses to save ppl, by law, they took an oath and abide the medical ethics. u try ask the police or soldiers to shoot civilians, or ask nurses and doctors to kill patients en-masse, see they agree with u or not?

now what laws, job scope, authority, powers, said the accountants must investigate their clients and penalise them? well?

one hand u expect police, soldiers, nurses and doctors to fulfill their job scope, within the limitations of the law, on the other hand u expect accountants to work beyond thier job scope, beyond the limits of the law? u sure u are rationale enuff to discuss such issues?

It's akin to saying the IT department needs to know every single byte of data that goes through their systems and if there's any irregularity, illegality and non-compliances, they need to know and report it.

 

[tequila_powered]

It's akin to saying the IT department needs to know every single byte of data that goes through their systems and if there's any irregularity, illegality and non-compliances, they need to know and report it.

The most famous (or some say infamous) real life business regulation is .... SOX that came out of the mother-of-all collapse-from fraud (at that time, but of course overtaken within a decade by even bigger frauds). After spending billions, internal fraud does not seem to abate. Instead, we got a whole new phalanx of people hired to oversee SOX (the proverbial who watch the watchdog).

While some new regulations are good (and we would like those who sign off on certification to be more accountable), we should always be mindful what an external accountant is able or unable to do.

 

[Jarlaxle]

i am not a lawyer. not qualified to discuss those i guess
but i tink personal liberties and such can make way for public interest. no?

but perhaps its time to implement something to regulate auditors or in-house accountants. we can always do that right? lol
once they hv legal liabilities, u can see how they perform

they can always practise DEFENSIVE MEDICINE like the doctors.
which is better for accounting! (cant say that defensive medicine is good for patient)

or u guys hv a better idea? pls share.

n i only know it is in the public interest to reveal

nah, doctors and nurses are not public servants. altho they can be.
even policemen are outsourced to aetos and cisco now.
only politicians are not outsourced.

if the auditors know that something is wrong, they can make public statement, resign from their role as auditors or even make anonymous report.

if it is a non listed or sme, the impact is not great.
but if its a mnc or govt agency, its gonna be real bad lol

China Hongxing: Special Audit Uncover Shortfall Of RMB1,154 Million In Cash.
w00t, 1billion RMB cash missing. for several years, the auditors din find it.
cant even count money!!! how to trust auditor reports? 1billion is not a small sum wor. how to miss?

end up, all of them utilised insider information to trade against the public. i know this is not related but this is a chain effect from crappy auditing standards or the current auditing landscape.

typical rubber stamp for many years.

(btw, never buy s-chips or kena from accounting fraud in my investment! juz jealous that i din manage to shortsell these stuff)

It's akin to saying the IT department needs to know every single byte of data that goes through their systems and if there's any irregularity, illegality and non-compliances, they need to know and report it.

of coz, otherwise u will conceal? or even use it to blackmail the person who cause the irregularity?!?!
id recommend to report it.

 

[Jarlaxle]

The most famous (or some say infamous) real life business regulation is .... SOX that came out of the mother-of-all collapse-from fraud (at that time, but of course overtaken within a decade by even bigger frauds). After spending billions, internal fraud does not seem to abate. Instead, we got a whole new phalanx of people hired to oversee SOX (the proverbial who watch the watchdog).

While some new regulations are good (and we would like those who sign off on certification to be more accountable), we should always be mindful what an external accountant is able or unable to do.

yup... enforcement and regulation always lack behind criminal mind.

juz look at the npark bicycle purchase!
the officer totally gamed the system which is supposed to be fair and transparent.

 

[Jarlaxle]

anyway my main concern is
how can willful accounting fraud be reduced?
yup, no easy answer n not expecting one.

as of current situation,
dun believe too much in auditor reports. when the fraud bubble finally burst, they can retract their statement/audit opinions easily without liability.

the most important indicator to note from auditors is :
when they resign from their role to the client.

this means serious sh it is happening and must siam else become Arthur Anderson 2.0

 

[sunzoner]

...

of coz, otherwise u will conceal? or even use it to blackmail the person who cause the irregularity?!?!
id recommend to report it.

unfortunately, this is not how the world works.

Job scope of IT personnel will never include look through the client's data and report to police if something seems wrong. same for auditors. They each have a restricted job scope.