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The PCAOB slams auditors for poor fraud detection. Corporations can expect steep audit fees to follow.
David M. Katz, CFO.com | US
February 15, 2007
White Collar crime has become rampant with the advent of software programs utilizing high tech number shifts in design, documentation and a data base from electronic criminals. Their approach is fraudulent and often difficult for auditors and regulators to detect due to the control and port of entry through an infected E-mail or a Web site. The portal entry is the company's computer and the target is to gain control over a company's information. Malware, is an umbrella term, known as malicious unwanted software which, at any point; can control your computer and the user's information. When an installation invades without your acceptance and knowledge, this breach can invade and rob the most intelligent Professional. There are many security programs designed to protect your most sensitive and personal information with desk top firewalls to secure customer privacy and a company's information. The investment will be your best protection and business practice.
Posted by Pamela Zander | February 08, 2009 03:58 am
The article states that 'In a similar vein, top auditors may be failing to press their underlings to provide enough evidence to support clean fraud opinions, according to Carmichael. He says he's seen many times in which auditors should have recognized that they didn't have enough evidence to substantiate their opinions but rendered them anyway. The reason? Lead audit partners aren't willing to do anything that might jeopardize their firms' relationships with key clients, he said, adding that "firms are plenty willing to end the client relationship when the client isn't important to them."' External auditors, as seen above, are more concerned with monetary resource accumulation rather than applying ethical decision-making to guide audit procedures so as to confirm or dispel suspicions of fraud. Game theory could indeed be applied insofar as the auditor benefits from not extending procedures to find fraud and the individual managers benefit insofar as they are not being caught as perpetrators.
Posted by David Newman | February 16, 2007 03:23 pm
Solving the mysteries of fraud detection is possible using game theory.
Posted by ROBERT F. Kelley | February 15, 2007 01:36 pm
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