Money Matters | The joke is on the auditors when it comes to true figures
It's been such a depressing week. Let's share some jokes. And the best jokes are the financial figures of many mainland private enterprises, and the fact that some investors actually believe them.
It's been such a depressing week. Let's share some jokes.
And the best jokes are the financial figures of many mainland private enterprises, and the fact that some investors actually believe them.
Talk to any auditor or forensic accountant and he or she will tell you why. Here are a few real cases. Sales confirmation is where audit work begins before an initial public offering. Letters are sent to a company's buyers to verify if it has indeed sold what it claims.
More than a decade ago, unsuspecting accountants trusted company management to post the letters seeking confirmation from buyers on their behalf. Unsurprisingly, many got burned by falsified confirmations.
Auditors began to post the letters themselves. Once again, they were cheated. How? Apparently some staff of companies planning listings kindly showed the auditor his or her way to the nearest mail box or office, which turned out to be a fake or a real office with a "fake" postman.
Some auditors were met by "actors" dressing up as managers in real or fabricated offices
The auditors switched to couriers. By now, some of you will have rightly guessed that companies began to hire "actors" to dress up as courier men to collect the parcels.