Peregrine Bank Confirmation

AU Section 330 (The Confirmation Process) (AS 2310 in PCAOB Standard) explains how the assessed level of
inherent and control risk determines the type of evidence auditors should obtain. According to the standard,
when should auditors consider confirmation procedures rather than using documents clients provided?
In the case, fraud was revealed when regulators moved to electronic confirmation of bank balances. What are
the advantages of electronic confirmations?
What are the risks associated with electronic confirmations? How can an auditor gain confidence in the
reliability of responses received electronically (Hint: AU Section 9330 - Auditing Interpretation of Section 330)?
Peregrine was audited by a one-person CPA firm. Do you think it played a role in the failure to detect the fraud
in this case? If so, why?