Saverio,
I guess that's why I posted the link to that article. Semi-Tech and their auditors used very similar language in their Policy 31 statement. Here's how the FPost reported it:
There was no mention of a "breakdown in trust" in the compulsory Notice of Change of Auditor Semi-Tech filed with securities regulators. In fact, the notice specifically stated there were no reportable events behind the switch, defined as "disagreements or unresolved issues with the former auditors related to matters of audit scope, accounting principles or policies, or financial statement disclosure." The document was signed off by both Semi-Tech and Ernst & Young.
I read the entire article and was left wondering just what it would take to have an auditor admit a disagreement. If not between those two parties, then when? And Ernst & Young is supposedly a reputable firm. Are these statements anything more than boiler-plate?
Now, granted, TCT is not Semi-Tech; however, is there still a lesson here to be learned? Hasn't TCT gone through three auditors in a relatively short period of time? Haven't their financial statements been delayed? Haven't top executives resigned, co-incident with rumblings of legal action?
I, for one, am willing to go out on a limb and question the accuracy of TCT's Policy 31 denial.
And I'm not only one who is not always eager to accept auditors' statements at face value. Here's are some excerpts from an OSC statement released this month:
At the Ontario Securities Commission, we are concerned about an apparent erosion of public confidence in audited financial statements.... In today's marketplace, there is a strong incentive to stretch the rules.... But where is the incentive for full and fair disclosure?... The problem remains that management may be tempted to seek out interpretations of generally accepted accounting principles that artificially enhance performance.... I am particularly troubled when I see signs that auditors may be active participants in this process. [My emphasis.]... In fact, I am concerned that the audit may become little more than a loss leader, as the accounting firms leverage the audit relationship to cross sell higher margin services.
osc.gov.on.ca
Frankly, I don't understand why TCT has had to go through so many accounting firms lately. I'm more than a little concerned that they can't choose one reputable firm and stick with them. So remind me again, what firm is TCT now proposing and what is their reputation?
Mike M
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