Posts Tagged ‘Longtop’
Range of U.S., Chinese, and Japanese regulators’ responses to fraud in today’s news – Olympus and Longtop
Sometimes you get fun results when you look at two news articles side by side. Let’s look at the responses of securities regulators in the US, China, and Japan. Hat tip to Going Concern for highlighting the articles.
Japan’s securities market regulator proposed a fine of $2.5M against Olympus for conducting a $1.7 billion financial fraud that was spread over 13 years – Japan market watchdog recommends $2.5 million fine for Olympus.
Let’s put that proposed fine into perspective. All amounts will be in US dollars.
So the auditor goes to the new client’s bank and gets copies of the bank statements from them. An entire year’s worth of statements. Does all the audit work. Everything looks fine. Issues their report. Everything is fine, right?
Except that in addition to the client cooking the books, the local bank made up those bank statements. Fraud came tumbling down because the auditor, yes notice the auditor tumbled to the fraud, went to the bank’s home office to get copies of the bank statements, which were drastically different from what the local branch provided.