As mentioned yesterday, StanChart did get a $300M fine for running afoul of their 2012 agreement. Their software to monitor wires for possible violations of money laundering laws didn’t pick up on one or several million wires that should have been flagged.
In addition to the fine, the bank agreed to permanently halt US dollar settlement for about 300 high-risk clients in Hong Kong and UAE.
A few links and comments of interest to auditors. Trained investigators can’t read when someone is lying; too-big-to-fail/jail/govern is just too big; and update on lease accounting.
6/10 – FBI – The Truth About Lying: What Investigators Need to Know – Detecting lies, especially in high stakes interviews (like a criminal investigation) is far more difficult that interviewers and investigators realize. There are complex factors behind why people react they way they do. Not telling the truth is merely one of many causes. Vast interpersonal differences create more complications.
If you try to discern truthfulness during your auditing interviews, might be worth reading the article. Since trained pros can’t do it very well, us CPAs might want to reconsider how well we do at detecting liars.
A few stories paint a clearer picture for me – cheating your regulator, some regulators getting frustrated with the number of issues, the disconnect from personal responsibility, and bringing psychology into the analysis.
Why are there sooooo many scandals involving banking?
Standard Chartered is in trouble again for money laundering issues.
Either I’ve been blogging long enough to see cycles repeating or the too-big-to-fail banks are getting more casual in their casual efforts to comply with US law. Or maybe I’m just suffering from confirmation bias.
Their software that is supposed to flag suspicious transactions allegedly failed to identify a million transactions that should have been reported to US authorities for review. That is according to the monitor installed to watch their compliance.
Unknown yet how many, if any, of the million suspicious wires were actually illegal.
Settlement negotiations are underway. Discussion in the air suggests a fine of $100M is possible. The bank’s chief executive has reportedly flown to New York to participate in the negotiations.
Last week I ran a series of five posts on the peer review reports that are being recalled. The issue is that a pension audit is considered a must-select. When a CPA performs a pension engagement, at least one of those engagements must be selected for evaluation during the peer review.
Vague stories floating around suggest somewhere between 200 and 1,100 reports are being recalled.
At the AICPA Peer Review Conference held last week, there was a presentation on the employee benefit plan (EBP) issue identified by the Department of Labor.
I will mention a few highlights from slides 8 through 10.