Pilgrim Petroleum Corp. (PGPM)

[awesomebummer]

No, its never that clean, even with Compilation-style reporting.


AICPA Compilation Procedures require that:

.16 The accountant should withdraw from the engagement and inform management of the reasons for withdrawing if (Ref: par. .A17–.A18)
a. the accountant is unable to complete the engagement because management has failed to provide records, documents, explanations, or other information, including signicant judgments, as requested,...

PGPM has not keep satisfactory records or documents. The CPA firm knows this. Or, at the very least, should have known this. One case in point, the significant discreptioncy in O/S balances, dates to 2008. The CPA firm that compiled the compilation report is the same firm that was preparing reports back in 2008, when the O/S balance allegedly changed.

Further, there is a serious question regarding the "independence" of the CPA firm in question, given the previous management activities of one of its principals, and the fact it is the current CPA firm involved with reporting for the parent corporation. This should have required a notation in the reports as to this fact, per the AICPA compilation requirements.

No, if a lawsuit ensues (which is what this current discussion was about) many parties, especially the CPA firm, will be named. Defending itself that it could rely on information provided by management will not suffice to protect it.