Luckin Coffee: Anatomy of an auditor response to fraud allegations

April 22 was the one year anniversary of Luckin's IPO and what a year it's been!

I am often asked, “Why doesn’t the auditor do something about the accounting fraud going on at XYZ Company?”

Investors press me even more to explain the typical auditor silence and inaction when a whistleblower’s accounting fraud allegations are made public or an activist investor publishes a research report that alleges fraud or “aggressive accounting” …