Market Discussions

I don't even know where to begin...
Audits in this game are not only extremely unprofessional, they are quite frankly a scam and a waste of resources.

Here are two rules I suggest that you follow:

1) If you want to buy debt: Never rely on an audit. Rely on intuition, personal risk tolerance, and most importantly, reputation and history of repayments.

2) If you want to issue debt: Refuse to get an audit, the 100-200m it's going to cost you is going to add very little value, especially when the community starts to realize how pathetically useless "audit reports" in this game (LOL) are.

Audits in this game are pathetic because:

There is no proof for independence
In the real world, there are a lot of safeguards that ensure that the auditors are independent.
In eve, there are none; An "auditor" personally benefits from winning an audit (due to the audit fee), and the auditor does not want to issue a qualified opinion (meaning something is wrong with the client's claims). If something ends up going wrong, well, "an audit does not give 100% assurance... I was independent, I swear".

Guess what? At the end of the day, it's the reputation of the auditor vs. the reputation of the lender.
Either way you're going to end up having to trust someone.

Audits are performed by only ONE person
Human nature. People make mistakes, and people miss things.
In real life, there is no such thing as audit work that has not been reviewed by at least another person.

Auditors giving the client business advice and strategy plans
Okay, so instead of providing an independent opinion on the client's strategy, a lot of "auditors" act as auditor consultants if they disagree with what the client is doing.
Do you see something wrong with that? Because I do - Instead of independently auditing another person's strategy, you are now auditing your own strategy; of course, you are never wrong, right?

Auditors writing lengthy reports and providing all of the analysis based on API
Have you ever seen a real audit report? It's about half a page in length, and we're talking about multi-billion dollar publicly traded companies presenting annual results.

Here is what is supposed to happen: The client should publicly prepare all this information for investors to make decisions. An auditor is simply supposed to check their claims. Or alternatively, the auditor could set some criteria themselves and report on it, but honestly, how much actual "testing" is actually going on? Besides compiling financial information and comparing the numbers to the API, and maybe looking at overall reasonability, the level of assurance you get from an audit is extremely low

If a lender wants to fraud you, an auditor is never going to detect this
Especially not an "eve online auditor", rofl.
Side arrangements? Related parties (aka: your friends making you look good)?
Yeah you can scan the API and journal entries for major amounts or names that appear too often, but if the lender is even a little intelligent, you won't find anything by looking at an API.


EDIT: At best, you can simplify it to say, 'yeah I had someone with a fairly good reputation look at my API and confirm my numbers. I paid him 200m, hope that makes you feel better'

To the extent that the OP is suggesting that the only acceptable standard for all audits in New Eden henceforth should be that of established RL auditing firms (e.g., Arthur Andersen, Deloitte, E&Y, KPMG, or PwC). this well-thought-out proposal is something all reasonable MD readers will surely support. Such firms are, as all people know, infallible.

And it shows.

Um... have you seen any of VV's audit reports? Just asking...

If I wanted to scam people, the first thing I would do is get VV's audit before I do so to raise significantly more capital.

An audit tells you nothing except verifying what you have and what you do with API; everyone can do something - it doesn't mean they're going to pay you back or honor their liabilities.

I also checked some of VV's audit reports, they're about as useful as the lender giving out his API key to creditors, it doesn't tell you much. Instead of trusting just the lender, you're now trusting two people and VV is 100-200m richer.

lol u beat me to it.

Do you know what else it states?
That due to the limitation of API: Vahrokh Consulting cannot and does not guarantee the accuracy, validity, timeliness, or completeness of any information or data made available to you for any particular purpose.

It's equivalent to an auditor issuing an opinion that nothing is wrong, and then stating a scope limitation on the entire thing saying 'Well, we're actually not sure about anything, and our entire audit was limited.... but hey, we see nothing wrong with issuing an opinion anyways LOL'.

Audits in this game are a joke and are only used to obtain capital from people who are ignorant of the implications of audits

This is not the fault of the people; not everyone is a stock market / audit expert.
It is the fault of the auditors who sell their services and preach the importance of audits, essentially making money off the ignorance of the community here.

I'm here to give you an alternate point of view;
Investments with audits done to them are higher risk - if anyone plans to create a huge scam for a bond or IPO, they're going to get an audit (which won't audit anything anyways) and leverage the ignorance of the community.

Good post and I can see your point of view.

I'm glad we agree that "the additional trust they will obtain by having an audit done on them may actually make it easier to execute a large and effective scam."

Whether in MD's case audits prevent more scams than they promote them; I haven't been around long enough to agree or disagree. However, I found it of importance to aware people of the dangers of audits and the increased risk.

I didn't raise the subject and hence I haven't done the proper legwork on this. But I don't think Mr. Bushar has either :-P

But I am fairly certain that the ratio of scams on audited loan versus non audited is showing that Audits do have a function in EVE.
An audit for me is in no way equal to a safe investment. Rather it (as Bad bobby stated ) removes the lazy on and often is an indication of that that person is actually doing what he is saying. That is trading and making a profit in one way or another. At least I know it isn't a Ponzi I am putting my money in.
Also getting a verification on a character activity also usually means there is a value to his reputation. It is very few scammers such as Bad bobby that has a value in their character.

Like me, if someone for some reason made an audit, it would show that Tom Hagen is a active toon and it is very likely that my reputation is worth more then a scam of a few Billions, also it would show my NAV and thus people could make a better assessment on the risk of my running away with the ISK.

Sorry in a rush here, hope I made some kind of sense :-P

Also, how cute, first you **** all over people you don't even know and then create the obvious (who was not expecting that?) bond right after. What was this, some tactic to be cheap and point to this thread when somebody else would obviously suggest you to get an audit done?

Got something to hide, to be so pre-emptive against investors screening?