An auditor verifies the accuracy of a company’s financial records. He or she is supposed to spot any material misstatements, including those due to fraud or errors.
And yet in two of the largest financial frauds in history—the 2021 collapse of German payment firm Wirecard and the recent bankruptcy of cryptocurrency exchange FTX—auditors had placed a stamp of approval on the companies’ accounts.
How did they get things so badly wrong?
To find out how audits can mislead I’m joined on the latest New Money Review podcast by Francine McKenna.
Listen to the podcast to hear us discuss:
What happened at FTX
Why FTX’s offshore location and audit practices raised red flags
The dangers of related party transactions
The Tether and Circle stablecoins
Why the 2002 Sarbanes-Oxley Act failed to stamp out corporate fraud
Regulatory capture and political corruption
Why audit is a process, not a test
How investors can protect themselves
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