Accounting for Aliens (and Auditing Standard AU-C 240)

Accounting for Aliens

Today the topic of our accounting podcast is a little unconventional.  We’re going to trace the concept of the fraud triangle back into an unusual case study involving a message from another world.  By doing so, we will answer the question, What do an alien prophecy, Auditing Standard AU-C 240, and a billion-dollar Ponzi schemer all have in common?

Along the way we’ll discuss the objectives and requirements of Auditing Standard AU-C 240, and how it relates to the requirements established under Auditing Standard AU-C 315, which discusses the auditor’s requirement to understand the entity and its internal control.  We’ll discuss what fraud risk factors are and cover the documentation required by AU-C 240.

The podcast includes a discussion about Ponzi scheme fraudster Scott Rothstein, which is used to shed some light onto the rationalization process.  So with all the themes interwoven, there’s a decent amount of psychology that found its way into this week’s conversation.  I really enjoyed this podcast, and I hope you do to.

View the text of clarified auditing standard AU-C 240.