Dogman,
I hope you weren't digging too hard.
Here's a link to a Denver news article on VARL's trading halt. I actually found the following comment entertaining:
"Bob Haugen, a principal at Haugen Springer, said the resignation was voluntary. He said his firm serves as an independent accountant for "one or two" other publicly traded companies."
One or two? He doesn't know? I can see saying: "thirty or thirty-five" but "one or two"? That's an error margin of 50% - 100%.
Also: "Haugen Springer cited a "lack of cooperation" from the company's former controller and said its resignation was prompted by the hiring of a new auditor, KPMG, to assist in the accounting investigation."
If you have an audit client who you believe has done something truly illegal (generating fictitious revenue and income), you dump them immediately. To drop VARL in response to VARL's hiring KPMG would seem to be logical if Hausen-Springer figured KPMG was going to find short-comings in their work which would have to be reported back to the audit committee and would then result in Hausen-Spinger being fired. Obviously, this is speculative, but Hausen-Springer's resignation seemed designed to hurt VARL. I also wonder what the controller said/did to Hausen-Springer staff that was deemed uncooperative. Maybe she flicked them the bird.
Dogman, I figure KPMG's gonna cost VARL at least 400K to 500K to get this mess ironed out. Sound reasonable? Also, I hope VARL can stiff Haugen-Springer on any related analytical work they haven't collected on as they failed to do their job.
I also hope that KPMG can help VARL with short-term damage control because Hausen-Springer certainly didn't. If all the issues are timing related, then management and KPMG should release a statement to that effect. |
