Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (12198)	3/8/2003 10:24:38 AM
From: PlayTheKing	Read Replies (2) \| Respond to of 14101

Jim, IYO, would differences over the method of accounting for the acquisition have been sufficient grounds to explain the split? The following are the most common reasons a company would replace their auditors: 1)Fee related; 2)As a result of the Parent company changing auditors prompting their subsidiaries to do so as well; 3) Incompetent Accounting Firm; or, 4) "Material" disagreement over accounting treatment and disclosure of transactions. Scenario 1 is highly unlikely, as fees may be negotiated and concessions are generally made in the client's favour by the audit firm; Scenario 2 is not applicable; Scenario 3, is also not applicable as E&Y is considered to be one of the Big 4 accounting firms in the world; ...which leaves Scenario 4 as the most logical explanation. Generally, public companies would switch to one of the other Big 4 firms if there was a dispute with the auditors..or, you would go to a 2nd tier accounting firm. When a company replaces their incumbent auditors, the new firm selected must write a formal request to the incumbent firm to determine whether there were any material issues arising from the audit, including whether accepting the engagement would put the accounting profession into disrepute. Schwartz Levitsky has 3 offices in Canada: Toronto, Montreal and Ottawa...they are not exactly the "rainmakers" of the accounting world. With a prior history with Schwartz I believe that REK knew she would have her way...we are now paying for it. The non-standard accounting - does it just seem the result of a "ma and pa shop mentality" (which I take to mean a certain bullheaded amateurishness) - or does it reflect, possibly, some other intent? When dealing with the Securities regulatory bodies GAAP rules. Period. The OSC, and more notably, the SEC, spend a great deal of time and energy poring over accounting literature and setting guidelines on how public companies must treat and disclose financial information. The key objectives of audited financial statements preparation are to produce accurate, timely and comparable financial statements. What we have in the DMX's case, is that their financials were not "consistent" with the rules. This does not mean that the information was not truthful, or accurate. I blame this on their auditors as Schwartz likely does not have the requisite experience to deal with these "basic accounting issues"...that is my opinion only. PTK