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NetSol Technologies, Inc. Message Board

  • shortthischeet shortthischeet Aug 20, 2011 9:24 PM Flag

    On JULY 28, 2011 AMENDED FILING Co. ADMITS INTERNAL CONTROLS ARE NOT ADEQUATE.

     

    A few things this company is consistent about no matter how its financial performance is doing:

    - Lying/manipulating

    - Endless dilution (40 million at end FY 2011 vs about 60 million estimated at end of 2011)

    - Never stop amending 10Qs and 10Ks

    - Inadequate transparency and internal controls

    On the last topic, in the the company's most recent amendment Netsol management states that its internal controls are inadequate, its Paki-trained CFO has no idea about us accounting rules and regulations, its entire financial personnel is incompetent and need training, etc.

    You can read this yourself if you go to SEC filings:

    Management’s Report on Internal Control over Financial Reporting

    "Due to inherent limitations of any internal control system, management acknowledges that there are limitations as to the effectiveness of internal controls over financial reporting and therefore recognize that only reasonable assurance can be gained from any internal control system. Accordingly, our internal control system may not detect or prevent material misstatements in our financial statements and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate."

    .." Based on the results of our assessment, the Company has determined that as of June 30, 2010, there was a material weakness in the Company’s internal control over financial reporting. Specifically, while in the performance of this assessment, management identified that its accounting staff do not have sufficient technical accounting knowledge relating to accounting for complex U.S. GAAP matters. In particular, although our CFO is a Chartered Accountant (CA) in Pakistan neither he, nor our controllers, holds a Certified Public Accounting (CPA) license in the United States. While the CA certification is recognized in several key countries relative to the Company’s operations, including Pakistan, the United Kingdom, and other British Commonwealth countries, the Company has determined that a deficiency exists with respect to required financial reporting expertise in the United States. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of June 30, 2010. Notwithstanding the existence of such material weakness in our internal controls over financial reporting, our management, including our Chief Executive Officer, believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented."

    ."Management is committed to remediating the material weakness as quickly as possible and we will continue to encourage our current accounting staff to both further their continuing education and to sit for the Certified Public Accountant exam in the United States. Additionally, and in recognition of immediate financial reporting needs, the Company intends to implement additional controls and procedures during the current fiscal year to continue to ensure timely and accurate financial reporting objectives. Such additional controls and procedures may include: The retention of a U.S. based CPA as Chief Financial Officer with U.S. GAAP experience and appropriate knowledge of internal controls over financial reporting, for purposes of appropriate oversight of the financial reporting process and continued training of the accounting staff; recruitment of additional personnel with relevant U.S. GAAP experience to enhance our financial reporting and internal control function; retention of the services of a consultant for advisory services with respect to SOX 404 compliance."



    Get ready for a major haircut right before and after horrible earnings report in less than 2 weeks.

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