FTI: Scaling the Great Wall of Accounting issues in chinese reverse...

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Scaling the Great Wall of Accounting Issues
in Chinese Reverse Mergers
By John J. Huber and Jennifer A. Hull∗
December 5, ...

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I. Introduction
In a speech to the Institutional Investor Conference in Washington on April 4, 2011,
Commissio...

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• the world focus on BRIC countries (Brazil, Russia, India and China) as the engines of growth, as
demonstrate...

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Market prices initially rose after completion of the reverse mergers. Market declines occurred17
after issues ...

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being in the U.S.; the companies being incorporated outside China, either in the U.S. or elsewhere, such
as th...

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This outline first describes the regulatory response, from the SEC, PCAOB, and the self-
regulatory organizati...

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c. Staff comments on CRM Form 8-Ks that cite Form 10 are the same as
Staff comments on Form 10 for non-CRM fil...

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(2) the extent of the audit committee’s U.S. GAAP knowledge,
where a company does not identify an audit commit...

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g. Whether the auditor would have the ability to comply with the PCAOB’s
documentation requirements.34
3. In a...

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(2) CBNM failed to perform sufficient audit procedures to determine
whether management had appropriately test...

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like other countries, will also embrace joint inspections. I view this as an urgent
matter”.41
III. The React...

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2. Interested parties ask management to address the issues raised in the short seller’s
report. Interested pa...

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auditor that had been disbarred from the PCAOB;52
misstated other accounting
issues such as profits and cost ...

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(4) Reported interest income on the balance sheet appeared low for
the $80 million of cash reported on the ba...

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raises doubts about management’s representations provided to us in connection
with out 2010 audits. . . .”60
...

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lower, at $1.13 per share. By November, Pink Sheets had discontinued the
display of CCME quotes because the s...

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1. In her Memorandum and Order, Judge Miriam Goldman Cedarbaum granted a
motion by defendants to dismiss a la...

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“During the months of March and April 2011, the Company believes that an attempted
market manipulation scheme...

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3. The SEC’s action has resulted in media attention both in favor of as well as
opposed to the SEC’s action.8...

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V. General Description of Accounting and Auditing Issues Involved in Recent CRM Litigation.
The final chapter...

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confirmation, he or she should consider performing additional tests of details and/or
analytical procedures.9...

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2. AU Section 316, Consideration of Fraud in a Financial Statement Audit provides
auditors with examples of a...

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affixed on the signature page of the sales contract belongs to a different company
than the one named in the ...

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(2) Reviewing the extent and nature of business transacted with
major customers, suppliers, borrowers, and le...

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c. There is a possibility that the illegal loan transactions continued. The
auditors were unable to complete ...

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F. Subsequent Events
1. ASC Topic 855, Subsequent Events defines subsequent events as events or
transactions ...

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financial statements for the fiscal year ended December 31, 2009 and the quarter ended
March 31, 2010.118
G. ...

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being published about your company. And, if one is published, you are better able to accurately
and completel...

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G. A review or an investigation can be time consuming, expensive and divert management’s
attention. So don’t ...

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