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Kazuo Ishiguro
House of Marbles
Posted - 2008.11.06 10:25:00 - [1]
 

Edited by: Kazuo Ishiguro on 30/06/2009 11:05:30
1. Someone said I should get an audit done. Why do I need one?

Borrowing isk from the general public should always be your final resort. Investors who don't know you personally will be unlikely to trust you, not least because it takes a great deal of dedication and integrity to run an offering to a satisfactory standard. An audit helps to prove certain basic facts about your operations without publishing any commercially sensitive information. Agreeing to an audit is generally seen as a sign of good faith, though they are not an infallible means of scam prevention.


2. Scope and limitations

If you're planning on expanding on your existing business activities, an audit is one means of confirming to the general public that you've actually been doing business. Anything that shows up in your API records can be inspected by an auditor - this page lists all the information available via the API.

From these records, an auditor or business advisor can also look at the level of profit you've sustained, and go on to consider whether or not there is sufficient potential for expansion to the level proposed.

One drawback of the API at present is that it does not directly distinguish between original blueprints and copies. If you want to prove that you own a (valuable) BPO, there are several other options:
  • Lock down the BPO and lend the auditor a share in the corp.
  • Put the BPO in a trade window or contract
  • Put the BPO in a copy, ME or PE job. Then the job can be confirmed via the API.
  • Similarly, put the BPO in a job longer than its production limit.

An API audit will not be as useful if you plan to try something you've never done before, or something exotic (such as Amarr Citizen 155's poker IPO). However, there's still the option of drawing up a detailed plan and talking about it, at length, in private, so that the auditor can give people a frank, independent assessment of it. It can also establish that you've got a certain level of business acumen, even if it isn't in a directly related area.


3. What information will be disclosed in the auditor's report?

Once you've provided your keys, you're at the mercy of the auditor. I can only speak for myself, of course, but I'm actually very careful in this regard. I usually hold a conversation with whomever I'm auditing and discuss exactly what they're prepared to reveal and what they want kept secret, as this varies considerably from one offering to the next. I aim to provide as much information as I think necessary for people to judge whether or not they ought to invest.


4. How do I grant access to my API information?

You need to log in to the site with each of the accounts being audited, and visit this page: http://myeve.eve-online.com/api

For an audit, unless specifically told otherwise, you'll need to provide your user ID and full api key, not the limited key available at the top of the page. You do not need to give out your username.

When the audit is finished, you can remove access by going to the same page and generating a new key.

Kazuo Ishiguro
House of Marbles
Posted - 2008.11.06 10:25:00 - [2]
 

Edited by: Kazuo Ishiguro on 30/06/2009 11:17:12
5. Auditing vs. background checking

Shar Tegral and myself are two of the busiest and most prominent auditors currently around. Although we use the same tools and methods, we have slightly different objectives when we do our work.

Shar prefers to stick purely to what he can prove empirically, and he carries out an exhaustive set of checks on each CEO's forum posts, employment history, and any relevant character sales, among other things. His audits generally take much longer than mine, and I think he's fully justified in charging fees for them.

I prefer to consider a business plan mostly on its own merits. My reports are concerned mostly with the information that I gain through my privileged position; i.e. through the API, and details of alts that a CEO chooses not to make public. As I frequently invest in offerings I've audited, I'm not afraid to offer feedback and criticism on the plans presented, both publicly and privately.


6. List of auditors

The following people, in alphabetical order, have all performed audits at some point and have not scammed anyone lately as far as I know:

Brock Nelson - on holiday from Auditing
Kazuo Ishiguro
Kazzac Elentria
Shar Tegral
Vaerah Vahrokha

If you want to be added to or removed from the list, or you have concerns about the trustworthiness of someone else on the list, please post in this thread.

7. Useful auditing software

EMMA
Eve Asset Manager
EVE-MEEP

All 3 can use the assets api, but I prefer Eve Asset Manager for asset checking. EMMA and EVE-MEEP both let you view wallet & journal entries, but EMMA allows you to create detailed profit reports. I only use EVE-MEEP if I need to check people's production history, or to check whether a blueprint in production is actually an original.

These are not the only programs available - just suggestions. Use whatever works for you.

Cheopis
Amarr
One Stop Mining Shop
One Stop Research
Posted - 2008.11.06 10:29:00 - [3]
 

Excellently done, and in a very brief time too!

Thanks Kazuo!

ingenting
Garoun Investment Bank
Posted - 2008.11.06 12:53:00 - [4]
 

Well done!

Also, maybe a list with trusted auditors?

Kazzac Elentria
Posted - 2008.11.06 13:15:00 - [5]
 

I like

Brock Nelson
Posted - 2008.11.06 16:04:00 - [6]
 

I just wanted to stay that I've never heard of Kazuo Ishiguro before, not sure if I'd trust him with my API for audit...

Ah hell, just kidding Cool

ofstrife
Posted - 2008.11.06 19:21:00 - [7]
 

I posted this link in the post that gave Kazuo the inspiration for writing this, but here's what Shar Tegral does when he audits an IPO.

Is there a list of known, respected auditors in MD? I know Kazuo and Shar are two, but are there any others at the moment? That would probably also be useful information in this thread if it's not here already.

YouGotRipped
Ewigkeit
Posted - 2008.11.06 20:30:00 - [8]
 

Edited by: YouGotRipped on 07/11/2008 07:02:59

Some time ago, Kazuo Ishiguro performed an audit of my market activities and needless to say I was very pleased with the manner he presented the results. I would like to attest to his professionalism and unquestionable ethics.

His present initiative - Audits 101 - amends the official IPO template patching an exploitable gap in the regulatory structures and should be regarded as a must read by any entrepreneur attempting to establish himself as a trusted person, eligible for receiving investment.

It is with great pleasure that I recommend this thread to be added to the community's resources list.

Cheopis
Amarr
One Stop Mining Shop
One Stop Research
Posted - 2008.11.09 08:28:00 - [9]
 

Bump - requesting Sticky or link insertion into existing resources sticky.

YouGotRipped
Ewigkeit
Posted - 2008.11.12 05:23:00 - [10]
 

Edited by: YouGotRipped on 12/11/2008 09:37:12



New IPOs / bond offerings aiming to raise a low amount of capital should be exempted from paying auditing fees in an attempt to stimulate starting players to take risks and undertake more an more complex projects.

However, I believe that submitting a permanent API key as soon as possible is a mandatory prerequisite that does not present an insurmountable barrier for the entrance in the industry branch, while the potential benefits make it more than worth it.

A "permanent API key" simply implies the consent of the IPO / bond manager not to change his API key as long as he wants to prove his good intentions.

Random checks could be performed to establish that the dividends are indeed derived from trading(/whatever the focus of the offering) and the managers in question are justified to launch another offering linking the previous one as a guarantee of their integrity/trading proficiency.

Originally by: Dagda Morr
Spot checks rather than an audit might indeed suffice - and could prove usefull in establishing a reputation if the OP is interested in running future schemes.


Yes, the only problem is that the IPO manager upon completion of his training offering already amassed some (uncertified) reputation and that could determine some MD members to (re)invest irrespective of the fact that an audit has yet to be performed.
Thus, he could be just another scammer paying divs that are not derived from the stated focus of the offering (Ponzi mechanism), with the sole purpose of cashing in at a later time.

I stand by my recommendation that an audit should be performed in just about any situation. As long as someone intends to present the community with an offering in the future, the sooner he discloses his API key to an auditor the better his chances of receiving the loan.



I urge the community to seriously consider the perspective of adopting "permanent API keys" as means of dealing with the scammers problem once and for all.
Perhaps Ambo's tool could be modified to take automatic snapshots of transaction's logs from time to time (for a given list of keys) thus further reducing the work of an auditor to a simple appraisal of recorded data prior to deciding whether someone's new offering is valid or not.

Brock Nelson
Posted - 2008.11.22 23:27:00 - [11]
 

I'm in the middle of an audit and the person being audited has asked me to see my report before he goes ahead with his IPO. I was wondering what's your stand on scenario like this.

Hexxx
Minmatar
Posted - 2008.11.22 23:31:00 - [12]
 

Originally by: Brock Nelson
I'm in the middle of an audit and the person being audited has asked me to see my report before he goes ahead with his IPO. I was wondering what's your stand on scenario like this.



Absolutely.

In RL, I generally sit down with my clients to see what they think of the results. If they disagree, and can give me some kind of new evidence that shows what I had done wasn't accurate, I'll change it.

Other times, if there is something that mitigates a given risk I include that, or at least give them a chance to respond in writing to the finding.

Make sure this is included as well.

In general, don't lie. If the client has something to add, and it doesn't contradict anything you said...I think it'd be fine.

Brock Nelson
Posted - 2008.11.22 23:48:00 - [13]
 

Edited by: Brock Nelson on 22/11/2008 23:48:22
The reason I ask is that I'm afraid that my audit result will discourage the client from going ahead with his IPO; especially if its negative.

But I see what you mean, the result can give insight to the client and give them the opportunity to tweak his IPO/bond plan before going public with it

Hexxx
Minmatar
Posted - 2008.11.23 00:44:00 - [14]
 

Originally by: Brock Nelson
Edited by: Brock Nelson on 22/11/2008 23:48:22
The reason I ask is that I'm afraid that my audit result will discourage the client from going ahead with his IPO; especially if its negative.

But I see what you mean, the result can give insight to the client and give them the opportunity to tweak his IPO/bond plan before going public with it



Absolutely!

In EVE you add value not just to investors through an audit, but also to the IPO manager. Perhaps you show that the business plan is flawed, suggest things to improve, or simply show the IPO manager that maybe this just isn't a good idea for them.

In business, being honest and transparent helps people, it doesn't hurt them.

Kazzac Elentria
Posted - 2008.11.23 05:39:00 - [15]
 

Originally by: Hexxx
Originally by: Brock Nelson
I'm in the middle of an audit and the person being audited has asked me to see my report before he goes ahead with his IPO. I was wondering what's your stand on scenario like this.



Absolutely.

In RL, I generally sit down with my clients to see what they think of the results. If they disagree, and can give me some kind of new evidence that shows what I had done wasn't accurate, I'll change it.

Other times, if there is something that mitigates a given risk I include that, or at least give them a chance to respond in writing to the finding.

Make sure this is included as well.

In general, don't lie. If the client has something to add, and it doesn't contradict anything you said...I think it'd be fine.


I always show the results of my audit to every client before I post it. Im upfront with them in that I'll post the results regardless, but presenting them with the report at least gives them the heads up to answer any questions that would result from it ahead of time.

I do this because, from my perspective an audit should never attempt to write up the report to sway investors one way or the other. It should merely be a confirmation of the OPs claims and report any and all confirmations of it or discrepancies from it.

I leave it up to the OP to defend or further back up their plan and the investors to weigh the information presented to them... not me.

I don't want to come across like a salesman

Shar Tegral
Posted - 2008.11.23 05:59:00 - [16]
 

Originally by: Kazzac Elentria
I leave it up to the OP to defend or further back up their plan and the investors to weigh the information presented to them... not me.

I don't want to come across like a salesman

And I would add, "salesman or judge."

This is probably the only reason I disagree with Kazuo's method. His presumes that he is so insightful and talented at business that those being audited should disclose their plans for him to approve or disapprove.

Pointedly, in example, the fact that I chose not to disclose my plans was suitable grounds for him to post a thumbs down on my project even though his audit found nothing to the negative.

Sometimes, some of us, buy our own hype.

Brock Nelson
Posted - 2008.11.23 06:05:00 - [17]
 

Interesting, I'd have to agree with Kazuo's need to know what the business plan in order to perform an audit. I mean, how do you verify if the client has the right skillset to carry out his business plan without knowing what he plans to do?

What about you Shar? Do you need to know what your client's plan is with the IPO/bond?

Amarr Citizen 155
Nordar Innovations.
Posted - 2008.11.23 06:06:00 - [18]
 

Originally by: Brock Nelson
Interesting, I'd have to agree with Kazuo's need to know what the business plan in order to perform an audit. I mean, how do you verify if the client has the right skillset to carry out his business plan without knowing what he plans to do?

What about you Shar? Do you need to know what your client's plan is with the IPO/bond?


Hello brock, where did you get your name?

Brock Nelson
Posted - 2008.11.23 06:11:00 - [19]
 

Is that a trick question?

Brock: Isaac Brock; British general who defended Canada from Americans in the War of 1812.

Nelson: Horatio Nelson; Powerful British admiral who crushed French and Spanish fleet during Napoleonic war.

Amarr Citizen 155
Nordar Innovations.
Posted - 2008.11.23 06:14:00 - [20]
 

Originally by: Brock Nelson
Is that a trick question?

Brock: Isaac Brock; British general who defended Canada from Americans in the War of 1812.

Nelson: Horatio Nelson; Powerful British admiral who crushed French and Spanish fleet during Napoleonic war.


Is that a trick answer? j/k. I'm a bit tipsy right now and was just wondering where your name came from.

Brock Nelson
Posted - 2008.11.23 06:15:00 - [21]
 

I knew you were ;)

Shar Tegral
Posted - 2008.11.23 06:17:00 - [22]
 

Originally by: Brock Nelson
What about you Shar? Do you need to know what your client's plan is with the IPO/bond?
Where skillset intersects with an audit, of course. Where it does not, or more importantly, where skillset is not part of the ipo...

To some degree I don't think the actual business plan itself is any of the auditor's business. Not to judge the validity of it. That is for the critical review of the investors themselves.

Again, imho, us auditors thinking that we know business so well that we can say something like "Yes, he's got the skills/assets/whatever that he says he does but I've doubts about the nitty gritty of the business plan" is beyond our scope.

In essence, it makes us either salesperson or anti-salesperson. Ours is to confirm the validity of statements and activities of the auditee. Ours is not to force someone to fit themselves into any image we deem "suitable".

Kazuo Ishiguro
House of Marbles
Posted - 2008.11.23 09:36:00 - [23]
 

Originally by: Shar Tegral
This is probably the only reason I disagree with Kazuo's method. His presumes that he is so insightful and talented at business that those being audited should disclose their plans for him to approve or disapprove.


You're confusing talent with my position as an auditor. What can make my opinion worth knowing is that it is based on information that most investors would not have access to, not any presumed talent on my part. Maybe a little, but not significantly.

As Hexxx pointed out, there are occasions when an auditor can provide useful advice. I don't possess godlike business skills that make my advice better than anyone else's; it's just that because I have access to more information than most people, it can be more relevant and detailed.

I'm not special; right now, plenty of other people could easily do the same job, and so could many more if they had my background. Trust, however, is in rather short supply around here, and it generally happens that most of the more widely trusted people keep themselves quite busy.

Quote:
Pointedly, in example, the fact that I chose not to disclose my plans was suitable grounds for him to post a thumbs down on my project even though his audit found nothing to the negative.

Sometimes, some of us, buy our own hype.


My job, as an auditor, is to make it easier for potential investors to gauge the level of risk that they'd be exposed to. In the absence of any pertinent information whatsoever, I made it very clear that people who wanted to invest would have to trust your word that whatever you chose to do with their money would work. I don't see what the problem was with that - plenty of people were prepared to invest in you on those terms.

Kazzac Elentria
Posted - 2008.11.23 20:01:00 - [24]
 

Originally by: Brock Nelson
Interesting, I'd have to agree with Kazuo's need to know what the business plan in order to perform an audit. I mean, how do you verify if the client has the right skillset to carry out his business plan without knowing what he plans to do?

What about you Shar? Do you need to know what your client's plan is with the IPO/bond?


Skill sets are almost always on the table in any audit. Whether its a POS chain (can the toon(s) anchor, at what skill, what is their corp standings, etc..) or if its a capital business (do all accounts have the needed slots to run a 24/7 component chain) all the way to an invention IPO (does the OP have the full set of science skills to at least 4?)

A business plan is often required as well, and if its not presented openly but instead presented privately to me for instance. What I will do is insist that the OP at least give some clue as to their plan and present to them a way to do without giving away the farm (most apparent in trade IPOs for instance)

But I'll still be up front and as frank as possible.. good or bad .. to the OP when I post an audit report.

Kazuo Ishiguro
House of Marbles
Posted - 2009.01.05 10:35:00 - [25]
 

Updated with a short list of auditors as per a recent request.

Holla Olt
Posted - 2009.01.06 14:57:00 - [26]
 

needs to be on the top page

Thoraemond
Minmatar
Far Ranger
Posted - 2009.01.28 00:45:00 - [27]
 

Perhaps it would be appropriate to take Xabier off the list of auditors, or at least put some note or indication of doubt beside his name?

Brock Nelson
Posted - 2009.01.28 01:45:00 - [28]
 

There's no doubt, if a trusted auditor supposely walked off with billions in investors and DBank's money then there's no way he's going to be trusted again. After a week or so, you'd think he would've posted in here claiming otherwise but it doesn't matter anymore.

Kazuo Ishiguro
House of Marbles
Posted - 2009.01.28 09:33:00 - [29]
 

Thank you for bringing this to my attention. List updated Cool

Mr Overclock
Amarr
Overclock Sales
Posted - 2009.01.28 10:14:00 - [30]
 

Although I can understand the reasons to get an audit, you dont mention anywhere the risk of someone getting an audit. With a full api key you seem to have full wallet history, you can see what he is researching,copying or producing , and I suppose you can see where the POS is located. The auditors themselves seem to be in the same bussiness as the people getting an audit.

Now bear in mind that Xabier was on that list and you get my point.


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