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To: Madharry who wrote (40592)	12/14/2010 12:34:55 PM
From: B.K.Myers	Read Replies (2) \| Respond to of 78753

It is not the auditor's job to detect fraud. That is a common misconception held by many investors. The financial statement audits done by external auditors are not designed to detect fraud, plain and simple. Audits of financial statements really do two things, when you break them down to the most basic objectives: (1) they double check the math to see whether everything has been added and subtracted correctly; and (2) they make sure that Generally Accepted Accounting Principles (GAAP) have been correctly applied. That may not sound like much, but that is what audits are. Audits were never designed to detect fraud. expertfraud.com The Enron case was unique in that the base for the fraud was reported in their financial statements - as a small footnote. The real error in that audit is that it was a "material" amount and thus should have been more prominently reported. B.K.