[email protected] (John Mattson) writes: > On another track... > It seems from my past experiences, that most auditors are fresh out of > college and working from a prepared script they read the night before. > Perhaps auditing is "boot camp" for accountants in training. That would > "account" for a lot of the messes: the S&L debacle, Coopers&Lybrand, .com > mess, mortgage meltdown, and bank frauds. What junior auditor is going to > report that Morgan Stanley is cooking the books.
the regulatory agencies have been increasingly playing 3monkeys (hear no evil, see no evil, speak no evil) ... so all the auditors have been "going along" (permeates the whole audit industry) ... since there hasn't been enforcement (if forced to, companies would shop for auditor that would go along). In the S&L crisis, there was executive direction to cut reserve requirements and eliminate oversight ... the responsible regulator refused and then was asked to resign so somebody could be appointed that would comply ... this has discussion of the S&L debacle and mentions the regulator that went along ... http://www.amazon.com/Two-Trillion-Dollar-Meltdown-ebook/dp/B001S49AV2/ possible to take-over S&L and use it as personal piggybank, it also helped if you had several congressmen in your pocket. .com bubble, investment bankers had an ipo-formula ... it helpd that each of the startups eventually failed after the ipo ... since it left the field clear for the next round. I had critisized some technology that was involved in number of IPOs. I was contacted to stop making such comments, that there were investment bankers expecting to clear $2B from upcoming IPO but that some of my comments might cut that by 10% and they wanted me to stop making such comments. It wasn't anything personal, just the investment bankers were totally amoral. I talked to some law enforcement agencies ... but they didn't seem to think there was anything they could do. recent item from google: https://plus.google.com/u/0/102794881687002297268/posts/Na745TVVYRs Quelle Surprise! SEC Plans to Make the World Safer for Fraudsters, Push Through JOBS Act Con-Artist-Friendly Solicitation Rules http://www.nakedcapitalism.com/2012/08/quelle-surprise-sec-plans-to-make-the-world-safer-for-fraudsters-push-through-jobs-act-con-artist-friendly-solicitation-rules.html mentions SEC not using Sarbanes-Oxley. note ... apparently even GAO didn't believe SEC was doing anything and started doing reports of public company fraudulent financial filings (even showing uptic after SOX). In theory, under SOX, all the executives (and auditors) would be doing jail time. http://www.gao.gov/products/GAO-03-395R . http://www.gao.gov/products/GAO-06-678 . http://www.gao.gov/special.pubs/gao-06-1079sp Note Sarbanes-Oxley was passed in the wake of ENRON & Worldcom ... claims that it would prevent something similar from ever happening again. However, there were jokes at the time that SOX was just full employment gift for auditors but wouldn't actual do anything (since it required action on the part of SEC). More recently seen on the internet: "ENRON was dry run and worked so well that it has become institutionalized". There were also comments at the time that possibly the only part of SOX was the stuff supporting whistle-blowers ... but that would also required SEC to do something. In the congressional hearings into Madoff ... the person that had tried unsuccessful for a decade to get SEC to do something about Madoff (SEC was finally forced to do something when he turned himself in), testified that tips (whistle-blowers) turn up 13 times more fraud than audits. Also that SEC has no "tip" line but has a 1-800 number of corporations to complain about audits. -- virtualization experience starting Jan1968, online at home since Mar1970 ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to [email protected] with the message: INFO IBM-MAIN
