Regulators Zero in On Audits of Related Parties; The subject of related parties continues to be a focal point of regulators and government prosecutors seeking to bring civil or criminal legal actions

http://ww2.cfo.com/auditing/2015/02/regulators-zero-audits-related-parties/

Regulators Zero in On Audits of Related Parties

The subject of related parties continues to be a focal point of regulators and government prosecutors seeking to bring civil or criminal legal actions.

Howard Berkowitz

February 26, 2015 | CFO.com | US

“Good friends help you move. Real friends help you move dead bodies.” Perhaps this ubiquitous (and anonymous) quote sheds some light on auditing standard setters’ recent emphasis on updating guidance regarding related-party transactions. Of course, by “real friends” I refer to a company’s related parties – and who better and more trustworthy to help conceal some of its dirty secrets?

In light of major corporate accounting scandals of the past two decades (think Enron, Tyco, or more recently, Olympus), which were perpetrated with the assistance of related-party transactions, auditing standard-setters have focused their attention on the heightened risk of fraudulent financial reporting that accompanies related-party transactions. But even if transactions and arrangements with related parties are not for nefarious purposes, standard-setters have recognized that activity with related parties increases the risk of error that financial statements are not presented fairly and will require an auditor’s careful inspection. Continue reading

Advertisements

Kroll: Understanding the mind-set of the Chinese entrepreneur, how business is done in China, and recognizing the tell-tale signs of fraud

http://fraud.kroll.com/articles/pre-empting-fraud

Posted by Low Hwan Hong, Year 4 undergrad at the School of Business, Singapore Management University

Written by: Violet Ho

China: The Business Pearl of the Orient? While attractive, China has gained a reputation as a place where deals and contracts are often treated more like ideas than bona fide agreements. In recent years, however, the business climate and regulatory structure in China have improved, and many analysts predict that with a little effort and knowledge, launching a venture in China could be an effortless exercise. But to succeed, it is important to understand the Chinese culture of doing business and the mind-set of the Chinese entrepreneur.Chinese entrepreneurship has for centuries been built upon two important attributes: Continue reading

Fraud detection and prevention

http://www.mb.com.ph/fraud-detection-and-prevention

Posted by Low Hwan Hong, Year 4 undergrad at the School of Business, Singapore Management University

by Wilma Miranda
April 7, 2014

Fraud is an old game and even in the Old Testament times when Jacob deceives his father to get his blessing over Esau (who is supposed to be deserving of the blessing because he is the firstborn) is a simple example of fraud. But through the years people became more sophisticated in perpetrating this kind of scheming activity. Alan Greenspan, former Chairman of the US Federal Reserve once said “.. It is not that humans have become any greedier than in generations past. It is that the avenues to express greed had grown so enormously…” Continue reading

Noble’s shock Q4 loss: Why no warning?

http://www.businesstimes.com.sg/opinion/nobles-shock-q4-loss-why-no-warning

Noble’s shock Q4 loss: Why no warning?

R Sivanithy

2 March 2015

Business Times Singapore

WHEN the share price of commodities firm Noble Group stabilised very shortly after a selloff following the release of a report by short seller Iceberg Research a fortnight ago which attacked Noble’s accounting practices, the market had high hopes that Iceberg’s criticisms would be easily dismissed and the attack quickly repelled. Continue reading