Fool me Once

As the book, Fool Me Once: Scams, Stories, and Secrets from the Trillion-Dollar Fraud Industry, points out, 

"Where there are people, there is fraud." 


As this Forbes article, 22 years after the $63 billion Enron collapse, a key audit review board finds the industry in a ‘completely unacceptable’ state, point out; audit is out of control and the situation is "completely unacceptable" per the PCAOB.

Here is the statement by Chair Erica Williams on the "Rise in Audit Deficiency Rates.  Here is the PCAOB 2023 staff report on inspection observations.

The volume and complexity of information associated financial reporting and financial auditing is mismatched with the tools available to accountants and auditors.  I have shown the possibility of more modern and professional tools, tools that are more appropriate for the information age.  All this is going to get worse before it gets better.  I have built some working prototypes of such such tools like this XBRL-based working trial balance.

I am not saying that XBRL-based accounting schedules and auditing working papers are "the solution" to the problem that exists; but I am saying it seems like it could be part of the solution.

Fraudsters have their "measures" and the audit industry needs to come up with "counter measures" in order to keep things in proper balance.  Well, we seems like we are out of balance with respect to audit.

What do you think the solution to this problem is?  The Great Transmutation of Financial Accounting, Reporting, Auditing, and Analysis provides information that will help you get your head around what is going on.

Additional Information:

Comments

Post a Comment

Popular posts from this blog

Relational Knowledge Graph System (RKGS)

Image
Relational Knowledge Graph System (RKGS) is an interesting idea that combines the relational paradigm and the knowledge graph paradigm.  This documentation, Why RKGS , explains the idea. This gets even more interesting with the notion of "relational AI".  RelationalAI is described as follows by the company of the same name, Relational.ai : “RelationalAI is a cloud-based relational knowledge graph management system, with state of the art probabilistic processing and declarative reasoning at scale to make developing Data Applications a superpower for your business.” This notion of knowledge graphs represented in relational databases fits into my belief that knowledge graphs have two aspects: the expression SYNTAX and the logic of what is expressed or SEMANTICS. While the LOGIC of a knowledge graph is always the same regardless of technical syntax used to express that logic; there are many, many different technical syntaxes that can be used to represent a knowledge graph. There
Read more

Graph Hairball

Image
Knowledge graph system logic, the "things" and "relations between things" that  graph theory calls "vertices" (a.k.a. nodes, points, entities, things) and "edges" (a.k.a.  links, lines, relations, associations), looks like a big graph hairball as some people call it an example of which you can see here: Why?  This common view of a graph is because there has to be some "general view" of the information provided by the graph.  This is just like a general view of the information within a relational database is a table ; a set of ROWS and COLUMNS for exactly one table at a time. So what is interesting is that with a graph database the default view is everything in the graph of knowledge.  Whereas the default view of everything in a relational database is one table at a time. Further, it does not really matter whether the information that populates your knowledge graph comes from, say, CSV files, Excel, JSON, XBRL, RDF, PROLOG or whateve
Read more

PLATINUM Business Use Cases, Test Cases, Conformance Suite

Image
A brick wall is made of exactly two things: bricks, mortar. But a brick wall created by a master craftsman, or mason, and a brick wall created by a “weekend warrior” with no knowledge of masonry will be very different. Master craftsmen are created and that process takes time and effort. This blog post is a first prototype that brings several things together into one useful resource for business professionals.  It pulls together the human readable information of the Showcase of Reports   and the machine readable information of the Conformance Suite of XBRL-based Financial Reports Prepared using the Seattle Method .  Then, I want to incorporate the information found in these PLATINUM XBRL-based Financial Report Examples . The three resources can be useful and used independently; but they are even more useful when used together.  Business professionals really could not care a less about the technical details of getting some result that they want.  But technical professionals need to under
Read more