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To: Sir Auric Goldfinger who wrote (8739)	7/12/2000 6:52:35 PM
From: StockDung	Respond to of 10354

Never Lie Subject 25065 always tell the truth. The truth does matter!! The Leader in Forensic Stock Research

To: Sir Auric Goldfinger who wrote (8739)	7/12/2000 7:24:57 PM
From: StockDung	Respond to of 10354

Visitors. We receive a constant stream of visitors at our Hong Kong office. Some come for business reasons, some are curious shareholders keen to view our operations up close. All are most welcome. Here we feature a few of our recent visitors. R Gordon Jones, CPA Partner Jones, Jensen & Company, USA momentumplus.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 42828/ May 25, 2000 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 1261/ May 25, 2000 ADMINISTRATIVE PROCEEDING File No. 3-10210/ May 25, 2000 Proceedings Instituted Against R. Gordon Jones and Mark F. Jensen The Commission has instituted public administrative proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice against R. Gordon Jones and Mark F. Jensen, two CPAs in Salt Lake City, Utah. Jones and Jensen are charged with having engaged in improper professional conduct by recklessly violating professional accounting and auditing standards in their audit of the 1995 financial statements of a now-defunct Utah corporation, Dynamic American Corporation. Jones, the engagement partner, was primarily responsible for the audit field work. Jensen performed the concurring partner review on the audit. The Commission previously instituted public administrative proceedings against Dynamic and six individuals based on a 1996 "pump and dump" scheme by which about $4 million in Dynamic stock was sold to the public. See, In the Matter of Jethro J. Barlow, CPA, et al., Exchange Act Rel. No. 41689 (August 2, 1999; In the Matter of Dynamic American Corporation, Exchange Act Rel. No. 41688 (August 2, 1999). In the order, the Division of Enforcement alleges that Dynamic's financial statements, included in the company's amended annual report on Form 10-K/A filed in November 1996, were not prepared in conformity with GAAP. Specifically, the staff contends that Dynamic's balance sheet improperly listed as an asset certain Bolivian mining properties that were materially overvalued at $36,600,000, or 91% of Dynamic's total consolidated assets. Furthermore, in performing their audit of Dynamic's 1995 financial statements, Jones and Jensen also did not act in accordance with GAAS in that they: failed to adequately plan the audit; failed to obtain sufficient competent evidential matter; failed to maintain an attitude of professional skepticism; failed to exercise due professional care in the performance of the audit; failed to issue a proper audit report with respect to the work performed by other auditors; and by using a lower-of-cost-or-market analysis, did not test the balance sheet presentation of certain "ore concentrates" valued at approximately $4.3 million. A hearing will be held before an administrative law judge to determine whether the staff's allegations are true, and if so, whether Jones or Jensen should be censured or temporarily or permanently disqualified from or denied the privilege of appearing or practicing before the Commission. sec.gov Bloomberg also reported the story: Salt Lake City CPAs Accused of Bad Audit on Dynamic American Washington, May 30 (Bloomberg) -- Two Salt Lake City accountants improperly audited Dynamic American Corp., a defunct Utah company that misrepresented the value of its South American mining properties, the Securities and Exchange Commission said. The SEC alleged in administrative charges that CPAs R. Gordon Jones and Mark Jensen ``recklessly'' violated professional auditing standards in a 1995 audit of Dynamic American, which described itself as a mining company. Dynamic American's stock registration was revoked last year after the SEC accused it of misstating the value of Bolivian mineral properties acquired in a sham transaction. The financial statements audited by Jones and Jensen overvalued the Bolivian mines at $36.6 million, the SEC said. Jones's lawyer did not have an immediate comment. Jensen's lawyer could not be reached. The men face a hearing before an SEC administrative law judge, who will determine whether they should be censured temporarily or permanently barred from practicing as accountants before the commission, the SEC said. Jensen is contesting separate SEC charges that he was involved with an improper audit of the financial statements of Sky Scientific Inc., a defunct Florida gold mining company, the SEC said. In March 1999, an administrative law judge ordered Sky Scientific, and 16 brokerages, stock promoters and former company executives to pay $14.8 million in penalties after ruling that they illegally touted the company's stock. May/30/2000 18:05 ET Bloomberg News,

To: Sir Auric Goldfinger who wrote (8739)	7/12/2000 8:42:42 PM
From: StockDung	Respond to of 10354

Rite Aid overdosed on accounting palliatives, experts say NEW YORK, July 12 (Reuters) - Questionable accounting methods employed by embattled Rite Aid Corp. to overstate its earnings by more than $1 billion are popular with some other companies, though in much smaller doses than used by the No. 3 U.S. drug store chain, accounting experts said. "I think many of the techniques employed by Rite Aid are employed by other companies, but to a much lesser extent," said Paul R. Brown, chairman of the accounting department at New York University's Stern School of Business. "Their numbers were nowhere near what they reported." On Tuesday, in its first financial statement since late 1999, the Camp Hill, Pa.-based retailer announced a $1.1 billion loss for the fiscal year that ended last February and said it had overestimated results for two earlier years by a total $1.06 billion. In aggregate, its retained earnings had been cut by $1.6 billion, the company said. Brown, who has been following the retailer's accounting woes, which have become the subject of federal investigations, said Rite Aid employed a couple of dozen methods to massage its results. "People usually don't play them all at the same time," said Eric Bosshard, an analyst at Midwest Research in reference to the techniques used by Rite Aid. "That's what made this situation unique." Some of the accounting methods fell into "gray areas" about whether a cost should be recorded, but some items, such as capitalizing repairs and some interest expenses, do not follow generally accepted accounting principles, Brown said. Repair costs and interest should be recorded as costs that go on an income statement and affect profits. By capitalizing those costs, Rite Aid was able to inflate profits. Rite Aid's finances have been the subject of investigations by the Securities and Exchange Commission and the U.S. Attorney's Office since last year. The company did not report its results for the year ended February 2000 until Wednesday because of its accounting problems. Rite Aid attributed the majority of the revision of its figures to inventory adjustments and "former management's overly aggressive expansion program for the last three years," Chairman and Chief Executive Bob Miller said in a statement. Sarah Datz, manager of public relations at Rite Aid, said the company was cooperating fully with federal probes and the retailer turned over materials from its $50 million internal investigation to authorities. Rite Aid, which reported more than $14 billion in sales for the year ended February 2000, acquired PCS Health Systems Inc. and six separate drug store chains with 1,409 stores. The company also opened 376 new stores, relocated 727 and closed 818. Two accounting giants Arthur Andersen and Deloitte & Touche spent the last seven months helping a new Rite Aid management team to unravel the company's accounts. KPMG, the former auditors of Rite Aid, resigned in November after the firm said it could no longer rely upon Rite Aid management's representations of the retailer's finances. The company replaced most of its top management last year. "For KPMG, this is clearly embarrassing," Bosshard said. "But as an outside auditor, you can only deal with the information you're provided. I don't think KPMG was complicit or involved in it. They got horrible information." Brown said the delay in KPMG's ability to uncover the accounting troubles was "perplexing." "The magnitude of the restatements are at least on the scale of Cendant," Brown said. KPMG could not be reached for comment, while Deloitte & Touche declined comment. Cendant Corp. <CD.N>, a company best known for its real estate brokerage franchising operations, was formed by the 1997 merger of CUC International and HFS Inc. The company endured an accounting scandal in 1998 at CUC that slashed billions off its market value and led to three former CUC executives pleading guilty to fraud in June. When auditors review a firm's financial statements, they are only really charged with making sure the results are materially accurate and give a fair representation of the state of the company's business, Brown said. "If management overtly and purposely tries to mislead the auditor, it is doubly hard for the auditor to do the job," he said. 19:51 07-12-00