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More Madoff Misery
Old 01-20-2009, 02:05 PM   #1
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More Madoff Misery

The negative stories connected to this bozo bastard thief criminal continue to develop.

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Bernard Madoff's longtime auditor is gravely ill with cancer and his family has reportedly lost much of their money from investing in the $50 billion Ponzi scheme.
Madoff Auditors' Family in Turmoil - Articles - Financial Planning
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Old 01-20-2009, 02:18 PM   #2
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Originally Posted by mickeyd View Post
The negative stories connected to this bozo bastard thief criminal continue to develop.



Madoff Auditors' Family in Turmoil - Articles - Financial Planning
Sorry the guy is sick, but he must not have been much of an auditor.

ha
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Old 01-20-2009, 06:02 PM   #3
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Actually he is probably lucky that he has lost it all and is on the way to checking out, because surely as the auditor of Madoff he has been negligent in his duty of care and as such would be the subject of many lawsuits. However, if he was clueless enough to audit Bernie's books and not be able to join the dots and risk his own monies in the fund, makes me wonder where he got his accounting qualifications from.
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Old 01-20-2009, 06:12 PM   #4
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Actually he is probably lucky that he has lost it all and is on the way to checking out, because surely as the auditor of Madoff he has been negligent in his duty of care and as such would be the subject of many lawsuits. However, if he was clueless enough to audit Bernie's books and not be able to join the dots and risk his own monies in the fund, makes me wonder where he got his accounting qualifications from.
Many if not most major crimes are missed by auditors. Auditing is primarly the process of ensuring that the companies books and records comply with accounting standards and provide a reasonable picture of the entity's financial situation.

One of the primary things you learn in auditing is that there is often not much that can be done if there is an active plan of deceit by the company's management.
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Old 01-20-2009, 07:09 PM   #5
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Actually he is probably lucky that he has lost it all and is on the way to checking out, because surely as the auditor of Madoff he has been negligent in his duty of care and as such would be the subject of many lawsuits. However, if he was clueless enough to audit Bernie's books and not be able to join the dots and risk his own monies in the fund, makes me wonder where he got his accounting qualifications from.
Or he could be pulling a Ken Lay. Someday I'm going to find the Polynesian island these guys are hanging out on. Then there will be a king size can of whoop-ass opened.
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Old 01-20-2009, 07:54 PM   #6
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One of the primary things you learn in auditing is that there is often not much that can be done if there is an active plan of deceit by the company's management.
So you are saying that an auditor isn't supposed to call up the banks and brokerages to be sure that the funds are there? They are just supposed to see that the crimes are commited in the proper style?

Can anyone say "tits on a boar?"

Ha
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Old 01-20-2009, 10:21 PM   #7
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Many if not most major crimes are missed by auditors. Auditing is primarly the process of ensuring that the companies books and records comply with accounting standards and provide a reasonable picture of the entity's financial situation.

One of the primary things you learn in auditing is that there is often not much that can be done if there is an active plan of deceit by the company's management.
Saluki, whilst I probably agree with your first para, I disagree with the second. Part of an audit is to ascertain whether or not what is contained within a company's books actually exists. That can mean contacting a companies debtors or bank to verify that what the company being audited has on their books matches what the bank has.

If Bernie was alleging he held a certain position in a company the auditor should have followed up randomly to seek confirmation.

Basically Audit 101 is you aren't working for the company employing you for the audit but to protect the shareholders. Wasn't it Arthur Andersen who got spanked and ended up disappearing into oblivion because of the audit job on Enron.

At the very least this auditor failed in his duty to assess weakness in systems - ie. surely it was an issue that there was internal settlement of trades.
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Old 01-20-2009, 10:28 PM   #8
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Many if not most major crimes are missed by auditors. Auditing is primarly the process of ensuring that the companies books and records comply with accounting standards and provide a reasonable picture of the entity's financial situation.

One of the primary things you learn in auditing is that there is often not much that can be done if there is an active plan of deceit by the company's management.
Really? Then my last auditor gave me the proctology special. After checking every last entry in the books against bank statements and other random receipts, she made me take out the spare change box, and we sat there and counted every last penny and put that in the spare change as an account in the books. The audit took 9 hours for a non-profit that had $200k in revenue.
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Old 01-21-2009, 01:08 AM   #9
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So you are saying that an auditor isn't supposed to call up the banks and brokerages to be sure that the funds are there? They are just supposed to see that the crimes are commited in the proper style?

Can anyone say "tits on a boar?"

Ha
That's what he's saying, and saluki was/is a CPA, so I believe him.........
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Old 01-21-2009, 06:12 AM   #10
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That's what he's saying, and saluki was/is a CPA, so I believe him.........
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Old 01-21-2009, 06:23 AM   #11
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So you are saying that an auditor isn't supposed to call up the banks and brokerages to be sure that the funds are there? They are just supposed to see that the crimes are commited in the proper style?

Can anyone say "tits on a boar?"

Ha
Never said anything like that. Certainly substantive tests are very important during an audit. They would be even more important while auditing a firm like Madoff because of the limited internal controls.

However....

1. Let us not forget the Madoff Securities and his funds were self clearing. This should have set off red flags, bells, whatever becuase it makes it very easy to fool the auditors. There was no third party to call, accounts to verify, etc because they were all at his firm.

2. The purpose of an audit is not to totally recreate every transaction that winds up on the FS. That is why every audit report includes the term "reasonable assurance" disagree if you like, but there is often little an auditor can do in there in a concerted effort by management to defraud the shareholders. This is especially true when you are talking about a business where there is no physical inventory to verify.
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Old 01-22-2009, 12:08 AM   #12
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Still, if I was an honest auditor and the company I was auditing was under SEC investigation and had many reputable names warning about the ponzi aspect of the fund, I would have looked a little deeper perhaps. I think in this case you are defending a conspirator. I suspect he didn't get his money out in time, as opposed to being a victim. No proof, but that's my gut feeling. I felt the same way about Enron and Arthur Anderson.
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Old 01-22-2009, 09:10 AM   #13
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Still, if I was an honest auditor and the company I was auditing was under SEC investigation and had many reputable names warning about the ponzi aspect of the fund, I would have looked a little deeper perhaps. I think in this case you are defending a conspirator. I suspect he didn't get his money out in time, as opposed to being a victim. No proof, but that's my gut feeling. I felt the same way about Enron and Arthur Anderson.
I wouldn't defend this guy for a second, I'm just saying that even good auditors can miss a fraud if it is well executed.
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