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RE: Tether/Bitfinex Brings Crypto Down - Crypto Sad Hour - January 30th Edition
Agreed with this but that even audits have simple procedures for bank confirmations which is probably the focus here. They need to confirm that the $2B+ is on deposit somewhere. Of regulators want to get even more creative, they may even request that those funds be put on trust so that the Company cannot use them for operational (or recreational) purposes. That is, IF regulation existed...
Correct, for auditing cash balance, there are many simple procedures, but a financial statement audit opinion is not about one balance on the financial statements. Getting an "unqualified" financial statement audit opinion issued requires the auditor to independently obtain reasonable assurance the financials as a whole are in all material respects in conformity with accounting principles generally accepted in the relevant jurisdiction.
So, an agreed upon procedure approach might allow a company to obtain a tailored report from an independent party which will just focus on cash balance. It might even end up being the same procedures that might have been performed under a full scale audit scenario (bank confirms as you noted).