Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Quick description of Longtop, an auditing mess in China

with 2 comments

The Economist has a summary of the situation Deloitte  is tangled in regarding their audit of Longtop, a Chinese company that had some problems.

Article is here: Chinese Stall

Condensed thumbnail version in 75 words:

Deloitte noticed something odd in the books.  Inquiries about said oddities resulted in Longtop seizing Deloitte’s workpapers and refusing to return them.  Deloitte resigned.  NYSE delisted Longtop.  SEC wants to see the workpapers.  Deloitte refused because Chinese secrecy law prohibit release of the workpapers.  Now Deloitte is caught between a rock (SEC & PCAOB) and a hard place (Chinese secrecy laws, which as a totally wild guess probably have enforcement consequences that include jail time).

Check out the article.  It is the shortest, clearest summary I’ve seen.

Written by Jim Ulvog

September 23, 2011, 6:31 am at 6:31 am

Posted in Audits, Fraud

2 Responses

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  1. […] At least no one who could keep a straight face. (Ever see the SEC assert that an entire set of workpapers can not be shared with other regulators because they contain classified information?) […]

  2. […] My extremely brief summary of the Longtop audit can be found here. […]

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