"Then came June 2020, when, in the midst of an audit, Wirecard could not locate €1.9 billion in assets it claimed were being held somewhere in the world"
EY audited them for years without asking about the missing billions.
You can't make this up. EY screwed up, but they could not have reasonably assumed that someone sets up a fake bank branch.
As the responsible manager for IT (usually CTO - internal SOX was a different matter) I have been "asked" by EY (and KPMG) about IT setups and security several times for audits. And I could have told them whatever I like, the people were right out of university with no clue about the matter and in no position to ask the right questions except reading their checklist; I always had the impression they only knew half the words they were reading.
[Not the person you replied to.]
Did the person you replied to work for LinkedIn? What's the context for this question?
I misread this as "reponsible manager for IT [at Wirecard]", hence the question.
Do you have any programming skills? ... No? Then no. Then they started blabbing about what the data could be and it basically came down on them not understanding what random is and they then just checked it off and went on. Since then I do not believe any audit which come from those paper farms.
“Kinder prüfen meine Gesellschaft”
children check my company
„Kommen, prüfen, meckern, gehen“
come, check, complain, go
KPMG seems to have quite a reputation.
Though that reading is a bit weird, it's practical enough to tickle the funny.
When someone asks a question like this, they're not literally asking you to show them it.
They just want an expert to confirm it they could show it, so they can check off their box for due diligence.
Congratulations. You were the expert.
"Can you show it's actually encrypted?"
Yes, we ensure that the data is only available via TLS foo.bar with encryption algorithm baz, which is on the approved list. We have monitoring and logging that ensure that we receive an alert if the port the app is on is not encrypted, and if you'd like we can dump the traffic to show you that there is no clear text available.
Further, only users on the approved admin list can make a change or deploy to production, or login to the server as root. Moreover, we do a background check on employment for all users who have admin access, and all deployments and code changes require at least one other employee to approve them, and we log who they were, and what the change was.
But them knowing what they are checking, is maybe a reasonable ask?
Well, what is the purpose of an auditor then in this context? Genuine question. Not my world.
I know code auditors - and they have to know about programming and the domain to provide any meaningful audit.
In this context, they're just making sure the answer isn't "no, it's not encrypted". Sure, you can lie, and that would fool them. But your answer will be cross-checked with other employees, maybe with other documentation if those exists.
And sure, you can forge all of those as well, as Marsalek did with his bank statements. But these sort of verification significantly raises the bar to how difficult it is to commit fraud: you now need to get several people into the conspiracy to forge those documents and audit trail. Your average employee isn't willing to lie for their company for no good reason and risk prosecution, and may very well whistle-blow on you.
Software development has a frustrating history of reappropriating words from other contexts. Your "code auditor" is probably more akin to an OSHA compliance officer/safety inspector. Again, experience helps, but you don't need to be the architect of the Pyramids to ensure everyone onsite is wearing a helmet.
They make a good-faith effort to ensure some checklist of conditions are met.
https://newsinfo.inquirer.net/1441886/ex-dotr-exec-others-fa...
“The NBI said Arellano, an employee at the BPI branch in Malate, Manila, had admitted to receiving P10 million for issuing bogus bank certification documents that Tolentino and his law office needed as the supposed local trustee of Wirecard.”
I guess it goes to show that if you are dealing with enough cash to bribe third world governments then all kinds of new fraud schemes become possible.
We shouldn't discount the connections a GRU agent would have in 3rd world govs, they know who is corrupt enough (or able to be coerced) to do their bidding. Fake banks accounts is pretty old stuff in the spying world. It's not just money.
A billion dollars can buy a lot of grift.
But I guess bean counters aren't the demographic for heist or confidence movies so maybe the Hollywood ending didn't occur to them.
People litteraly went to the banks in Asia during the extraordinary audit, something that is not usually done during "normal" audits.
And yes, I also hate when I misplace my billions. Especially since I have yet to relocate them...
There are strict rules and guidelines around verifying an asset. The auditor isn't supposed to "believe the documents" - they need to form an independent opinion.^1
If the auditor is unable to obtain sufficient appropriate audit evidence to verify the asset, they can issue a qualified opinion due to a scope limitation.
^1 https://www.accaglobal.com/gb/en/member/discover/cpd-article...
What EY did was ignoring all the warning signs they had: money laundering, making up business, fraud and all that.
EY also wanted the proof the standards it seemingly met, that was the failure. But then those audits are not really meant to find organized fraud at a company to begin with.
It objectively wasn't. I've never heard of a case where the auditor doesn't independently verify the bank account balance with the bank itself. More reliable evidence reduces the need for additional corroborating evidence. In general the evidence obtained from the company itself wouldn't be considered reliable by itself.
https://www.ft.com/content/db9fa3d7-11da-476e-beea-d5ed0ad13...
This wasn't some hard to uncover marvel of accounting fraud using complex financial engineering.
If memory serves well so, it is quite a while I read Dan McCrum's book, Wirecard produced documents from the Asian banks (fake ones, as we now know). Of course, and I couldn't agree more, they should have at least called the banks up. Especially since a German fin-tech start-up, with on-going bad press, claims to hold billions with some Asian banks from business activities directly related to said accussations circulating in the press. EY deserves all the flak it got.
That being said, again, if a company wants to defraud its auditors, they can for surprisingly long periods if they try hard enough.
I think, we basically agree.
https://www.ft.com/content/bcadbdcb-5cd7-487e-afdd-1e926831e...
Didn't they setup a whole fake bank branch? Sufficiently motivated actors can circumvent any preventative measures.
I think you're joking, but I'm not sure. I work in trading, and I've been on the receiving end of that phone call. As I recall, it was around 9PM in the US, my work phone rang and could see from the caller ID that it was from our London office. There were no greetings, first words I hear were "We're missing over a billion dollars. You need to find it...NOW."
When I received that call, it was in the middle of the 2008 financial crisis. The daily PnL swings were wild, and it wasn't always clear on the cause. FX volatility was insane. We did all of our PNL reporting in USD, but held a lot of foreign assets.
There was no malfeasance; I'd just taken ownership of the system a week or two before, and a nightly job had silently failed. Perl job on Windows, extracting data from a 3rd party trading system that wasn't built w/ integrations in mind, feeding it into in-house systems. It was a very flimsy house of cards. A gentle breeze in the night would knock it over. Rewrote the integration in Python, hooked everything up into our monitored job scheduler. Had to do some janky UI automations in Python until we got the vendor to add a proper CLI-based reporting mechanisms. It was a "fun" ride, but I eventually got my evenings back. Did cause the end of a relationship, though, so there's that.
I can only imagine so the slight shock you had after that phone call so! I love those stories from the trenches so you hear on HN, thanks for sharing!
Seeing as I was hearing about Libor all day, every day (almost all of our clients had their mortgages computed on that piece of info), I had expected it to be something “automatic” (like at least an XML thingie) and well documented. Instead I had to parse some html on a page somewhere (I remember some yellow background) and hope that the HTML structure around that Libor figure would remain unchanged.
This was all happening around 2007 - early 2008, suffice is to say that when all the Libor scandal happened a little later on I was not at all surprised.
It's just survey data, and no verification of whether a loan can happen at that rate? And you throw away the lowest rates, which should be the market-clearing rate all-the-things-being-equal if lenders are fungible? And if lenders aren't fungible, then isn't it all apples and oranges?
Why wasn’t it fixed? Because replacing it would require an enormous amount of coordination and there was no clear evidence that it was broken. When that changed it finally got replaced by SOFR.
It was a club used by the big boys from banks to screw everyone else. With a madeup number that benefitted them.
The LIBOR rate-setting mechanism was a reasonable design for the world of 1986 [1], when finance was a smaller club and trust among bankers was higher. Also, it wasn't clear back then that the volume of contracts referencing LIBOR would grow to become many trillions of dollars just a short couple decades later.
When problems finally became very clear, we replaced it.
[1] One criticism often levied at LIBOR is why it sufficed to take a windsorized bank poll instead of looking at something more reliable, such as market transactions. But that's ahistoric: in 1986, banks didn't always do unsecured 3m lending on a daily basis. And later on, banks mostly stopped doing unsecured lending to one another entirely. So critics who suggest that LIBOR should've looked at market transactions entirely miss that finance, actually practiced, is a constantly moving target and it's hard to predict the future when designing benchmarks. SOFR, LIBOR's replacement, looks at secured interbank lending — a practice that was rare when LIBOR was created.
Occurrences of 'litterally' your comments:
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
Occurrences of 'litteraly' in your comments:
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
Usually, I comment on mobile. And if I realized one thing, my orthography takes a very serious hit when typing on a phone, compared to a proper keyboard or handwriting.
I wonder sometimes how much of it is in the training sets for various LLMs by now.
I really hate it when I leave my billions somewhere in the world and can't remember where.
https://www.independent.co.uk/news/uk/crime/secretary-who-ha...
Imagine being so unfathomably wealthy you don't even know how much cash you should have control over from one day to the next. Actually don't, it's bad for your brain.
It's all just relative.
I've mislaid thousands. That's years of income in many countries.
You don't need to be that wealthy before a days wages for you is a months wages for someone poor in many countries.
Indecently wealthy is relative: people look at their own incomes and often compare upwards but rarely seem to compare downwards.
You left the best part out: "...but could not trace the money and decided he was mistaken."
JFC!
A throwback to the ancient world to the Middle Ages, hiding spies among the clergy!
Seems related: Russia is more frequently arresting religious leaders (all sorts), typically on terrorism charges
ref: https://www.uscirf.gov/religious-prisoners-conscience/forb-v...
ref: https://www.aljazeera.com/news/2023/4/2/ukraine-court-puts-m...
ref: https://www.themoscowtimes.com/2023/02/03/russia-jails-islam...
ref: https://www.nytimes.com/2021/10/24/world/europe/russia-churc...
ref: https://www.uscirf.gov/religious-prisoners-conscience/forb-v...
2000's sidebar: It killed me watching Russia overtly copy the US model of boogey-manning terrorism into an flexible excuse to expand State reach and power
These bombings were blamed on Chechens- who hotly denied it. It has long been suspected- but not really proven- that the FSB was behind it, as a true False Flag operation to gin up support for invading Chechnya, done under the orders of former KGB/FSB agent Vladimir Putin who just happened to be the one to benefit most from the attacks. You can see the wikipedia page at https://en.wikipedia.org/wiki/1999_Russian_apartment_bombing... to see more details on exactly what the evidence for this is, and the people who argue that there is just not enough evidence one way or another to assign responsibility.
So, no, Russia was not "overtly copy the US model" if anything they were innovating it first and the US was copying.
[https://en.m.wikipedia.org/wiki/Gulf_of_Tonkin_incident ] Gulf of Tonkin?
The tail wagging the dog is as old as, well, government. Probably older. Nothing new under the sun, etc. etc.
They are also openly supporting invasion of Ukraine as a kind of "holy war".
The russian word for "non-government organization" is "foreign agent".
It was a western lie that Putin wants to invade Ukraine up to the second it happened, and then it became obviously the only possible choice overnight.
The most important thing to understand about Russians is that they were trained for centuries to be passive cynical conformists. It mostly worked. There are some actual nationalists who want the war. But most Russians view them as madmen who are "sticking out" and will suffer for it eventually. It's as stupid to be openly unpatriotic as it is to be too patriotic. See girkin.
Most Russians just subconsciously detect the safest position and orient themselves accordingly. Not because of conscious fear, simply by default. If Navalny became Russian president - the next day 80% of Russians would be completely persuaded they were always against the war. Orthodox church doesn't have much influence, IMHO, it's just aligned like everything else.
Most Americans do exactly the same. Look at the reaction to 9/11 and the subsequent invasions of Afghanistan and Iraq.
The vast majority of Americans couldn't identify either of those countries on a map let alone understand their history and culture yet it was "safe" to go along with it lest you be called unpatriotic.
In USA it's about 50/50 on almost every issue. It's nothing like Russia. In USA a significant percentage of population openly protested Obama on the point that he isn't American. Try that with Putin :)
I don't think it's the same at all. Attitudes towards the Iraq war changed massively during the presidency of George W Bush [1]. They didn't suddenly flip when Obama came into office.
Also, looking at America today from the outside, what I see is a very polarised country with very entrenched opinions that I don't see changing much regardless of who wins the next election.
[1] https://www.pewresearch.org/2008/03/19/public-attitudes-towa...
Sure it changed once they saw the (wholly predictable) actual reality of the war. But the fact that a solid majority supported the debacle at the outset, despite Bush's lies at the time being roughly on par with Putin's lies about Ukraine today (in terms of being transparently BS) -- does tend to support the point the above commenter is making.
And are basically talking about something else.
I'm not having a general Iraq war debate. Everything interesting has already been said about that.
https://www.nytimes.com/2004/04/29/us/the-2004-campaign-the-...
Is not even comparable.
https://fivethirtyeight.com/features/republicans-pessimistic... I mean christ, look at that graph. Republican opinion changed overnight. There are even more examples for this exact effect. Seems when republican voters say "economy", they might mean something else.
People constantly paint America with a single brush. What you see on CNN, MSNBC, FOX etc isn't America. We get shit on constantly for doing that to other countries so it's always annoying when others do exactly that to us.
I'm not sure Navalny is against the occupation on Crimea and Ukraine, there's nuance there, he has said he's against the Russian Military interventions, but he is still a Russian nationalist and has (to my knowledge) been against the conduct of the war and wants a diplomatic solution but it's not clear to me that he would have ever "given" Crimea back.
We'll never know, but I "feel" like that would have damaged him politically had he been in power in Russia and therefore doubt he would have. But again, we'll never know. And it's purely theoretical, even if he wasn't dead, there is no scenario that I can realistically think where Putin would have allowed Navalny to replace him, absent the FSB/oligarchs assassinating Putin. But even there, I suspect Navalny would still have been murdered and we'd still just get "Putin-lite"
I have lots of respect to the guy, but realistically the only scenario where he would become Russian president would be if the vote for the Russian presidency was conducted in the West. He would win a landslide victory. In Russia though, if you go outside Moscow and St.Petersburg, it's not that people are against him — they simply never heard of him.
In the USSR in the 80s there was a lot of talk of one Angela Davis. She was presented as "the only opposition leader" or something. There's no doubt that if the election for POTUS was conducted in the USSR, she'd win over Reagan by a huge margin. In the USA though not many people knew who she was. So Navalny is the Angela Davis in reverse — the media across the border makes him look like punching in the weight category he does not really belong to.
Regarding Russian political landscape, you can look in any corner, from Gorbachev to Solzhenytsin and anything in between. There are not many points that these people could all agree on. But not a single Russian politician was comfortable with the thought of Ukraine joining NATO. And this includes Navalny too.
Every time Russia lost a war they had a temporary liberalization. Usually orchestrated by the government because there's no civil society in Russia.
As for what Russians thought about Nawalny - doesn't matter, never did. Nobody knew who Putin was, yet fsb made him a president no sweat.
And don't get me started about NATO. Russians will almost all immediately flip from "Ukraine in NATO is an existential threat" to "nobody cares" the moment the narration in tv switches.
The russian trick of presenting their dictators as the reasonable forces keeping the even worse tendencies of Russian people contained is obvious bullshit. In reality Russians will just go along with almost anything.
This seems similar to how the people in Germany reacted after the Nazis lost WW2.
This has led to some interesting quirks historically. For example, in Japan, the local Orthodox Church is the offshoot of the Russian one, and at the time of the Russo-Japanese war in 1905, it had a Russian archbishop heading it - https://en.wikipedia.org/wiki/Nicholas_of_Japan. Upon hearing of the declaration of war, the Japanese clerics under him asked him what they are supposed to do. He told them to pray for the Emperor of Japan and the victory of his hosts, since, as Orthodox, it was their duty to pray for their country's ruler and army during a war. He himself, being a Russian subject, could not do so, but also could not openly pray for the victory of Russia in the war while remaining in his position as the head of the Church of Japan; and he believed that it would be inappropriate for him to abscond from that duty and to flee to Russia. So he gave his bishops the blessing to pray according to the canon, and excused himself from public services for the duration of the war.
partly so - in this world, among the worldly ways, the temporal ruler has authority. However, the bargain is.. at birth, at death, in times of great peril, or any day when there are hungry, poor, afflicted, ill or outcast citizens (every day in other words) the temporal ruler has agreed to acknowledge One God (not the person ruling) and implement the words of the Christian canon .. to attend to those who are needy, sanctify marriage, watch over the helpless and bring food and medicine to those that need it.
In the modern times of post-industrial plenty, these crucial agreements are often overlooked. Yet this is how civilization grew from the barbarian times in the Western world.
Thats pretty accurate though.
Let me try. We're you ever on an amateur IT conference? Comicon? Some sports event? Would it ever occur to you to assume some government is secretly behind it? When the Jehova witnesses or scientologists knock on your door - which government is financing them to do it and why? After all people don't do things for free.
A Doctors Without Borders medic is an agent of a foreign organization, therefore a foreign agent.
Therefore CIA and DWB are essentially the same thing. Bonus points if you can find one case where a DWB volunteer also had ties to the CIA, which would totally expose the two orgs as being exactly the same in all ways at all times.
For some reason people just can’t resist reductionism.
Being a bit reductive there, eh?
:)
NGOs in Russia ALL have to register as foreign agents. Including the ones who organize comicons etc.
This is the reason I told you you don't actually understand.
As for your video I don't have that much time for propaganda, care to summarize it?
"That's not what people meant". No, people are pointing out holes in your reductionism.
Official state churches are part of the state.
> They are also openly supporting invasion of Ukraine as a kind of "holy war".
What about a holy war to bring democracy and freedom to ukraine. Would that make it better?
> The russian word for "non-government organization" is "foreign agent".
It's everyone's word for NGOs. Haven't we been attacking chinese 'ngos' as being 'foreign agents'? It isn't a secret that we've been using NGOs as intelligence fronts for a very long time. What do you think NGOs exist to do? Provide aid? Help foreign countries?
Funny was how they try to present them as modest, but cannot properly remove their Rolex out of a picture (or bother not wearing a Rolex).
https://www.bbc.com/news/world-europe-17622820
Hard to imagine, how anyone can believe such people in a spiritual way.
Unfortunately, there is typically a big revolving door between them and any tax institution. Why toil for decades in underpaid public roles, when you can step into the gilded world of consultancy and double or treble your salary? It's like the yacht scene in The Wolf of Wall Street, except in real life most civil servants take the corrupting deal (and I can't even blame them).
Most audits are just “does the documentation support the reporting”.
I feel like this is pointing out something like, “More criminals drive Ford trucks than any other truck” which is true, but just because more people drive that brand than any other?
Reminds me of https://xkcd.com/1138/
Partners in the small set of auditors/accountants that can deal with big companies will kindly send the command to overlook certain important documents if they are paid enough.