Behind the Money
Why auditors are missing red flags
May 22, 2024
Exploring why auditors are missing red flags in audits, the challenges faced by regulators and investors, deficiencies in audits by big four firms, and the push for stricter global standards in the auditing industry. The podcast also discusses the need for auditors to detect wrongdoing more effectively and the ongoing evolution of audit practices to ensure trust in capital markets.
17:55
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Quick takeaways
- Auditors' failure to detect red flags in corporate accounts raises regulatory concerns globally.
- Regulators aim to modernize auditing standards to enhance fraud detection and clarify auditors' responsibilities across industries.
Deep dives
Key Point 1: Wells Fargo Scandal and Auditors' Role
The podcast delves into the Wells Fargo scandal, where thousands of unauthorized accounts were opened without customer consent, leading to billions of dollars in fines and executive ousting. It highlights the shocking revelation of systemic fraud and the pivotal role auditors, like KPMG, played in failing to flag internal investigations early on. This scandal underscores the ongoing concerns about auditors' effectiveness in detecting corporate fraud and the increasing deficiencies identified by regulators in audits.
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