Confirmation Letters. Part of a standard audit is to have the client's banks send letters directly to the auditor confirming the existence and amounts of client's bank accounts. I haven't followed the Parmalat scandal so this is likely old news but this article states that auditors of Parmalat were fooled by a phony bank confirmation letter. The author of the article questions "Is it too much to ask that the auditing firms come up with a foolproof way to assure that bank accounts are real?"

I've googled this topic and can't find a consistent story about the confirmation letters. One site said that a Parmalat employee gained access to the letter before it was mailed and flew to New York to mail the letter (I guess so it would have a New York post stamp).

But this opinion piece at Accountants World asks

How gullible is an auditor when no one thinks to ask why a company needs to sell bonds if it has 5 billion euros in the bank? How dumb (or duplicitous) is the auditor who accepts a smudged fax copy of a bank letter as confirmation of a 5 billion euro bank balance without some sort of secondary confirmation?