In the simple days, an audit consisted primarily of verifying that the company had all the physical and financial assets that it claimed, and that it reported all liabilities that it owed.
In the world of Cyberspace, most of AOL's "value" - it's Assets - is wrapped up in its Membership Count. AOL has a book value of only several hundred million, yet has a Market Capitalization of over 2 Billion - and it has been as high as 6 Billion in the last year.
Conventional audits focus on financial statistics, but AOL's perceived value is based on its perceived membership. Does a publicly traded company's auditor (Ernst & Young, in this case) have any responsibility to audit membership numbers? Has any indepenent auditing agency ever verified that AOL's membership numbers are computed reasonably and state reaonably the value of AOL's membership base? |
