Suchergebnisse

• eBook-Kapitel aus dem Buch Global Management Challenges for Internal Auditors

  The Financial Sector: Risks, Controls and Assurance after the Financial Crisis

  Daniel Nelson

  …the US, Euro-area, Japan, and the UK – grew up to USD 4.1 trillion or 7 percent on a total stock of USD 57.7 trillion. How was it possible to fall… …countries being represented by their respec- tive heads of state or government. It had never done that before the financial crisis, when only ministers and… …capital for its operations as would have been the case with a lower credit rating. On September 16, 2008 AIG lost its AA- rating (it had already lost… …internal audit. 4 Lessons for Internal Auditors First of all it has been reported that internal audit did not have sufficient or adequate access to… …area in an entity. Nelson 96 It has also been reported that enterprise risk management (ERM) and the finance complex did not have adequate… …funds we can all assume that those resources will be closely scrutinized, particularly in the public media. I submit as discussed earlier that it is… …of the factors contributing to this financial cri- sis. It would be interesting for internal audit to review whether the organization’s compensation… …policies and model are indeed appropriately tailored to its business model or whether it is a risk in itself.…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 31: Bankgesellschaft Berlin (Germany, 2001)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …Accounting Fraud in European Companies 186 Case 31: Bankgesellschaft Berlin (Germany, 2001) It is a spectacular tale of incompetence… …bank insolvency), this time it did not involve any elite private bank, but the most powerful banking house in the German capital. The crisis ex- posed… …. While Berlin’s city-state government owned the majority of BGB’s shares, the new institution was also publicly listed. That made it an unusual hybrid in… …the German banking system. Moreover, the way BGB was structured and managed left it vulnerable to weak controls and conflicts of interest. Its complex… …mix of businesses made it difficult for the supervisory board of the parent institution to maintain control and insist on clear risk reporting from… …Aubis and agreed on the credit line without the usual collat- erals and checks. However, Aubis failed as it saw itself unable to rent out the refur-… …were not just businessmen, but old CDU colleagues who had sat alongside him in parliament for many years. Then it came to light that Landowsky had… …, BGB quickly became one of the leading players in the Euro- pean real estate investment fund market. However, it was buying market share by assuming… …admitted it could not complete its 2000 accounts because of the ongoing investiga- tion and deep uncertainties about the potential risk in the… …property-linked portfolio. When BGB belatedly reported its official figures for 2000 in July 2001, it had to reveal a startling EUR 1.65 billion loss. It also…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 40: Kanebo (Japan, 2005)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …corporations. It had started making cotton in the 19th century and went on to become the number two in Japan’s cosmetic market. Its principal operations… …discovery of a series of accounting frauds in companies in the Japanese IT industry, and the frauds in Japan reminded many observers of the “Enron… …guilty to falsifying Kanebo’s financial statements. He had taken over the company in 1996, and when it became clear that he couldn’t stop the… …order to improve the company’s operating results and to make it appear solvent. Another method was improperly “de-consolidating” certain Kanebo… …those entries. When they pressed the issue, Hoashi argued that Chuo Aoyama had long accepted the company’s accounting practices and said it was pointless… …auditors. The presiding judge said: “The crime significantly eroded the public trust in the auditing system. It is shameful that they have failed to… …market turmoil in its wake. In a statement, PricewaterhouseCoopers said it would assist Chuo Aoyama in its reform efforts but at the same time… …called “Aarata” (meaning “new and fresh” in Japanese) commenced operations. In the subsequent weeks, it acquired dozens of former Chuo Aoyama clients. In… …addition, about one-fourth of the employees left Chuo Aoyama and joined Aarata. (Given the dire lack of qualified auditors in Japan, it would have been… …2007, Misuzu announced that it was disbanding. In the aftermath of the Kanebo audit failure, the FSA began to investigate the audit practices of…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  A Practice Aid for Company Executives: The Ethics Barometer

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …290 Appendix: Practice Aids Appendix I A Practice Aid for Company Executives: The Ethics Barometer It is essential that the board and… …. However, it is advisable to tailor the content of the barometer to the situation in which the organization finds itself. For achieving customization… …honest and reliable: he does as he says and fulfils his responsibilities. A.11 In my immediate working environment, it is sufficiently clear how… …. A.12 It is easy for me to comply with the company’s standards of conduct because there is a strong level of commitment from top management and… …standards of conduct is provided to me when I need it and is clear and easy for me to understand. C.4 The training is effective in guiding my decisions… …first-hand knowledge about misconduct, I would feel comfortable reporting it to my colleagues or my supervisors. C.8 If I observed or had first-hand… …knowledge about misconduct, I would feel comfortable reporting it to the ethics hotline/the compliance department. C.9 As a result of the incident… …fraud awareness sessions is adequate. C.18 The company has established its compliance policy by means of a long- term integrated plan. It regularly… …standards of con- duct, I think it would be because they are trying to help the organization achieve its goals and meet its business targets. D.5 If a… …manager or a colleague does something which is not permitted, some- one in the organization will find out about it. E. Personal Data (optional)…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 43: Sanyo Electric (Japan, 2007)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …Electric Co. struggled with heavy financial losses as it faced a brutally competitive pricing market for many of its products. These products (including… …should have accounted for USD 1.5 billion in subsidiaries’ losses in 2004 but booked only around USD 400 million, thus falsely reporting a profit when it… …was largely in the red. In February 2007, Sanyo admitted that it had been approached by Japan’s Secu- rities and Exchange Surveillance Commission… …(SESC) about its past accounting. Sanyo announced that the SESC was investigating it for allegedly failing to account for valuation losses made on… …the losses were focused on its LCD unit (which it liquidated later on) and its chip making division. Eventually, Sanyo said it might have to… …restate its earnings for the four years between 2000 and 2004. The investigation was a blow to Sanyo at a time when it made great efforts to turn… …temporarily after being implicated in financial statement fraud at Kanebo, the cosmetics firm. It had also been the auditor for Nikko Cordial, which had to… …and her reliance upon a consultancy firm run by her husband. In December 2007, Sanyo admitted that its group figures were wrong since 2000. It… …said it miscalculated earnings from dozens of subsidiary companies to the tune of USD 3.5 billion over six years to March 2006. In March 2004, it had… …falsely reported a profit instead of a loss. Sanyo apologized to investors, saying it would strengthen its management team and internal controls, but…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 20: AOL Time Warner (2002)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …entertainment giant headquartered in New York. The implied market value of the merged company was approximately USD 200 billion, making it the then-largest… …started to flatten. It was during this period that AOL engaged in accounting fraud to mask the fact that it was also beginning to experience a rapid… …for goods and services it purchased in exchange for the vendors’ purchases of online advertising in the same amount as the mark-up – “Business… …and services. In the third quarter of 2000, AOL paid PurchasePro USD 2 million for software licenses it neither needed nor intended to use. In… …parties it referred to PurchasePro entered into commercial arrangements with this company. AOL essentially paid third parties to Accounting Fraud in… …from PurchasePro, but falsified documents in order to create the appearance that it had actually referred third-party purchases to PurchasePro. In the… …these memberships as sub- scribers, although it knew that the memberships mostly would not be activated by the employees. The so-called “attach rates” –… …several instances, AOL counted bulk subscribers although it failed to complete the transactions within the respective quarters. In last-minute efforts to… …meet the quarterly targets, AOL shipped non-conforming membership kits to the customers prior to the quarter end – with the understanding that it would… …management of AOL Europe; for example, it caused its own designated directors and steering committee members to act in accordance with AOL’s directions. How-…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 3: Crazy Eddie (1987)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …multi-pronged fraud, probably one of the twentieth century’s most infamous frauds. And even though the fraud is more than two decades old, it provides vivid… …financial statement fraud of all time, but for outrage- ousness, it is going to be very hard to beat.” In 1969, Eddie Antar, a 21-year old high school… …dropout, opened a modest con- sumer electronics store in Brooklyn, New York City. It was at this tiny store that Antar acquired the nickname “Crazy Eddie”… …. That inventory shortage, concealed from the public, was larger than the total profits the company had reported since it went public in 1985. The… …Accounting Fraud in U.S. Companies 38 inventory. Besides, Antar’s underlings shipped stock from one store to another overnight, so that it could be… …periods without being recorded. (As a result, Crazy Eddie never knew what it really owed.) – Improper disclosures: In one year, Antar stated that… …risky. – The accounting firm had allegedly “lowballed” to obtain Crazy Eddie as an audit client, realizing that it could make up for any lost audit… …revenue by selling the company consultancy services. – It was further alleged that the field auditors were very young and inexperi- enced. Antar… …altered documents. (Crazy Eddie used an outdated manual inventory system. The absence of a computer-based system made it much more difficult for the… …private holdings in Crazy Eddie stock at a time when the company’s financial condition was deteriorating, but when it was still being portrayed as healthy…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 25: Bernard Madoff (2008)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …understanding, as was the case with the U.S. subprime mortgage crisis. It was the result of one of the simplest and one of the oldest embezzling schemes: a… …stunning fraud that appears to be of epic proportions”, and the Economist called it “the con of the century”. Needless to say, the unprecedented scope of… …older ones. The scheme lasted six months before it was uncovered. Today, the conception of such a scheme seems almost incomprehensible. Besides its… …returns. The SEC admitted that it had missed “repeated opportunities” to discover the fraud. It had received “credible and specific allegations regarding… …red flags was so long and unsettling that it should have raised serious concerns with regulators and potential investors (see Gregoriou/Lhabitant 2008… …Madoff’s purported track record was so good and so consistent that it should have been suspect. Based on mathematical probabilities, the average returns… …niece Shana served as the in-house legal council (it might be noteworthy that she was married to a lawyer who had served at the SEC and had repeatedly… …supervised inquiries about Bernard Madoff’s securities operations). In general, this heavy family influence should have been questioned, as it was an… …162 tions and required advisors to count each final investor as a client, Madoff still did not register. It was only after an SEC investigation that… …largest hedge fund is a fraud”. This time, the SEC followed up on his tips and investigated BMIS. But it found no evidence of a Ponzi scheme, just a few…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch IT-Unterstützung für Interne Revision und Wirtschaftsprüfung

  Voraussetzungen für optimalen – systematischen – IT-Einsatz

  Dr. Heinrich Schmelter

  …Einsatz der IT in der IR müssen folgende Voraussetzungen bereitgestellt und organisiert werden: – Hardware – Software – Zugang zu Unternehmensdaten… …Fachbereichen und insb. der jeweiligen IT- Abteilung notwendig. Die IR benötigt einen regelmäßigen, systematischen Zugang zu den wichtigsten Unternehmensdaten… …direkten Zugang zu diesen Systemen ggf. mit Spezial- software besitzen. Damit für diese Daten auch innerhalb der Revision die – in der IT selbstredende… …. Voraussetzungen für optimalen – systematischen – IT-Einsatz 145 6 IT-Kenntnisse und -Erfahrung Der effiziente und effektive Einsatz der IT in IR und WP setzt… …. Rechnungswesen und Finanzierung – C. Kosten-/Leistungsrechnung – D. Gesetzgebung und Wirtschaft – E. Informationstechnologie Zu den Details verweist das… …DIIR auf die vom IIA53 dazu ausgewiesenen folgenden IT-Anforderungen: – Information Technology – IT – Control frameworks (e.g., COBIT) – Data… …(EDI) – Functional areas of IT operations (e.g., data center operations) – Encryption – Information protection (e.g. viruses, privacy) – Evaluate… …investment in IT (cost of ownership) – Enterprise-wide resource planning (ERP) software (e.g., SAP R/3) – Operating Systems – Application Development –… …Darstellung der IT-Anwendungsvoraussetzungen bereits mehrfach erkennbar, benötigt die IT in der IR auch eine angemessene Organisation. Es sollte vermieden… …die meisten WP-Gesellschaften über spezielle IT- bzw. EDV- Revisionen mit hinsichtlich IT speziell ausgebildeten Mitarbeitern. Weil die Prüfer sich i…

  Alle Treffer im Inhalt anzeigen
• eBook-Kapitel aus dem Buch Accounting Fraud

  Types of Fraud

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …, managers, and employees of organizations, ranging from petty thefts to sophisticated financial statement frauds. It is illustrated in Exhibit 3 (see Wells… …three major categories, there are several sub-categories of fraud scheme types. It should be noted, however, that a number of cases described in… …misappropriation, or both accounting fraud and corruption. In these cases where there are multiple schemes, it is impossible to subdivide the losses in order to… …show exactly how much of the loss was attributable to each of the component schemes. As a consequence, it is necessary to address each of the three… …the property, but has “misappropriated” it. Asset misappropriation is the most common of the three primary categories of occupational fraud… …Skimming Cash is stolen from an organization before it is recorded on the organization’s books and records - Employee collects payment from a customer… …but does not record the sale Cash larceny Cash is stolen from an organization after it is recorded on the organization’s books and records -… …steals outgoing check to a vendor and deposits it into his own bank account Register disbursements An employee makes false entries on a cash… …sub-categories are very similar in nature, and it is important to understand the differences that exist among these categories. Sub-category Description… …, rather than to influence it - Purchasing agent is lavished with an expensive vacation or other items when a vendor’s contract is approved Economic…

  Alle Treffer im Inhalt anzeigen