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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (41834)	3/18/2011 5:10:37 PM
From: ValueGuy	Read Replies (2) \| Respond to of 78525

The funny thing is...those examples were just the tip of the iceberg! IMHO the way the auditing model works now is flawed, as the auditors are supposed to be critical on the companies that pay them the fees. But short of a central body that can co-ordinate the paying of fees to auditors (which I'm sure will be exposed to abuse as well), I'm afraid we'll have to make the best of what we have. Madharry, I'm no expert on the legal system, but I do know that auditors do not have responsibility to spot a fraud (they have a responsibility to report the fraud if they encounter it, but are not responsible to actively look for it). If you look at the audit opinion: "We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion." Tried to take a look at a couple of healthcare companies - namely ones that outsource patient care such as EMS, and I must say I'm not impressed. Some numbers for EMS: P/E = 21.43 L/T debt to Net earnings = 3x Liabilities to SE = 1.06 5yr capex = 225m (Net earnings have been 431m for the same period) Though it is decent in other areas: EBITDA/Revenue = 10.21% Interest expense = 10.13% of Operating Income Current ratio = 2.65 ROE = 15.58% I would have thought a company in the healthcare sector would be more attractive...or is that just a common misconception?