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

To: PlayTheKing who wrote (12203)	3/8/2003 3:14:33 PM
From: Ron Nairn	Read Replies (2) \| Respond to of 14101

Thanks for the scenario presentation PTK. Scenario #1 is N/A because the CA's did sign off affirming GAAP in Canada. If in dispute, they would not have done so. That is their responsibility. Scenario #2 is the only option. The CA firm might as well close up otherwise. I believe things are not so black and white as you suggest. A dispute over rules leading to another firm being hired would be understood by the new company. The firms are obligated to communicate in a change over. The new firm would know the old firm's position and would have satisfied itself that it could defend its different position. Obviously, the OSC does not agree with the new firm's audit declaration. We do not know precisely that this was the matter that caused the company to change firms. It seems reasonable but it is not conclusive. An audit firm that cannot defend its audit is in trouble. This is not a fraud issue. This is a matter of rules interpretation. Schwartz has done DMX and itself a huge disservice, not to mention the shareholders who depend on their audits. GAAP is not clearly black and white. And there are significant differences between US & Canada GAAP precedents. I have no idea what rules apply in Europe for private companies that do not have sales. Likely pretty low key because there are no revenues to tax and few shareholders to worry about. Therein likely lives the valuation issue. Rondo