In fact, when reading the cases described below, you would probably not be surprised if even some cats would prefer to pull the covers back up over their heads again. Still, the following scandals from the recent past show that balance sheet manipulation is by no means a phenomenon of the past and one company even managed to destroy about 85% of its market capitalization within just a few days in 2017. Read on to find out more.
Balance sheet manipulations have made quite an impact in the media in recent years with cases like Enron and WorldCom. But, beyond that, there has been a series of inconsistencies in the more recent past that have affected almost every industry. Recent cases include the Serie A in Italy, where two clubs are currently threatened with forced relegation to the second division. In addition to this, the trials of the ex-Monte-Paschi chief Fabrizio Viola and the Bawag trial, in which 9 people already stand accused, are eagerly awaited. We have taken these latest cases as an opportunity to provide an insight into possible balance sheet manipulations and will present further cases as examples next week.
In a previous series, we have already discussed the risk of postings at the weekend and demonstrated how postings of this type can be identified in SAP. However, we did not take into account that not all weekends are the same. These days, a large number of companies have units to be audited abroad, or conduct international business, and the question then arises: When exactly is the weekend and what differences are there? This is what we are going to take a look at it in this post, and as you will see, there's definitely something for everyone.
What happens in cases where data analysis is used to uncover something quite out of the ordinary? – Well, you guessed right… we will share the details of them with you on our blog, as long as they are brought to our attention, that is, and we have the permission to publish them from the people concerned, of course. When all is said and done, we just wouldn't be auditors if we didn't assess the whole thing from a professional standpoint. So read on to find out more for yourself!
Machine Learning (ML) and Artificial Intelligence (AI) are both hot topics right now, but the audit industry is having trouble developing suitable use case scenarios. The reasons for this can be manifold, so what we would like to do here, with this series on data science, is to provide you with the basis you need to have a proper understanding of the methods and new incentives for the development of use cases. If the use of ML and AI algorithms is to fail merely because of an inadequate understanding of the methods, then clearly it is time to look at these topics more closely and to evaluate opportunities and risks.
We are all familiar with it, and most probably all of you use it, but perhaps only some of you have ever asked yourself the question: How do you audit it? What we are talking about is nothing less than the payment program in SAP. In this article, we explain the issues involved and how you, as an auditor, can best approach the matter.
Entering business transactions in the correct accounts is one of the basic requirements for proper accounting. In today's blog post, we will therefore consider the correct way of entering receivables in SAP. I will show you how you can check in SAP whether your receivables accounts contain similar business transactions or whether postings are being made to receivables accounts in an unsystematic way which can be a cause of quite some irritation. Because if receivables accounts are used in an incorrect way, in the worst case scenario, this can lead to misstatements on the balance sheet. And that’s always something auditors should be on the lookout for!
...but that the tax office does too. Here, once again, what we are talking about is, of course, sales tax. We will shed light on when sales tax is actually incurred and is thus to be declared accordingly... and how you can find out in SAP whether you are behind with sales tax. Because, for the tax office, that is very often no joking matter: The State needs money!