The AUDITING SCAM The board members set up an auditing committee and pay Auditor Ernie and associates to verify that CFO David's statements are not misleading.
Auditor Ernie says "Nope, they're not misleading. Here's my bill. Now pay me for this valuable service I have provided and this valuable opinion I have given."
The board members obediently dish out shareholder's money.
After all, it's the law.
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But then one day, Muddy Nobuddy (of whom nobody has previously heard), pipes up "But Auditor Ernie and his associates are all lying. They have good reason to verify the statements of CFO David, who is also lying. There are 5 of Auditor Ernie's former partners deriving retirement income as current members of the board."
The board members exclaimed "5 of Auditor Ernie's former partners being paid on the board?
Why that is just terrible!! Regardless of the price, we must immediately hire Auditor HiPrice and associates to verify that Auditor Ernie and associates were making truthful statements about CFO David's staements."
"But who will pay for this second audit?" one foolish, semi-competent board member dared to ask.
"Don't be ridiculous!! Of course, the shareholders will have to pay Auditor HiPrice to verify that Auditor Ernie was not lying when he verifed the statements of CFO David."
"But why should the shareholders pay again?" the foolish board member persisted in foolishly asking. "Why shouldn't Auditor Ernie's firm pay to defend themselves? Or why don't the members of the profession of which auditor Ernie is a member pay, in order to protect the esteemed reputation of the profession?"
"Don't be foolish!! That just not the way things are done in Auditor Ernie's esteemed profession. It 's always the shareholder's responsibility to prove that he has not been lied to or mislead by scheming or esteeming professionals.
After all, shareholders are not professionals; they don't really matter.
They are just stupid, trusting SHEEP fit only to be FLEECED! Therefore, they DESERVE to pay!"