Did anyone read the report? "In consideration of the agreed upon procedures we completed on December 20, 2011 for the cash verification requested by NASDAQ, which including visiting in person of the bank, physically observing bank employees printing bank statements, etc., we planned a more simple procedure to confirm the bank balance; but the Company refused and insisted we follow the process the Company had arranged."
BDO planned a more simple procedure but ZSTN wanted to folow the process the company had arranged. Does this mean that ZSTNs procedure was more thorough than BDOs and BDO only wanted to follow its own simple procedure?
We can't say ZSTNs procedure is more thorough. We don't know the difference between ZSTNs and BDOs procedure of verifying the cash.
I am at a loss to understand why ZSTN wouldn't allow BDO to employ their own simple way to verify the cash. What they had to lose in that? Had they allowed them to do that, stock would have been higher and investors would have been happy. And what was the need of closing the bank account and transferring all the money into a new account in a different bank?
was that Dec.20 procedure agreed upon by just Nasdaq and the auditors,or all 3 parties If all 3 parties agreed ro it then there seems to be a problen here with the auditor,and nasdaq should [or should have]taken that into account.
Don't you think BDO has a huge responsibility here? I mean, if you are right (and you are), there was no need of any particular procedure to find out that the company didn't have all that cash. So how does it come that BDO never realized there was something wrong with the cash, and have been fooled so easily all this time? What is the role of auditors if they can't protect shareholders from mismanagement or fraud?!
Before 2011, when the chinese fraud exposed, everyone took it easy, even they knew it was a fraud.
Now, BDO could no longer sign off their book. ZSTN probably was going to report another record breaking earning. Personally, BDO's head quarter would not allow them to sign off the book without any strong eveident.
Yes, BDO is as guilt as ZSTN. Unfortunately, we can not sue them. Also, don't you think RODMAN & RENSHAW and other people had a dirty hands on this one.