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Friday, July 23, 2021 12:43:59 AM
In case you don’t know how an audit works - I worked as a financial statement auditor for a number of years. They are big jobs and the first time takes a lot of work. Internal controls need to be established, documented and walked through with the auditor, beginning balances are audited as well. It’s like two audits in one because you can’t rely on end of year values if you can’t rely on beginning of year values. Right? Any how there are a lot of companies in this Holding Company that need to go through all of that. It’s not just one company and will be a huge undertaking. At the end of the day, the Auditor’s report is going to say something along the lines of, “the Financial Statements are the responsibility of management. Our responsibility is to state an opinion on those financial statements based on our audit which we believe provides a reasonable basis for that opinion.” There will still be a Going Concern disclosure and a long Notes Payable disclosure. These factors are far more alarming to me than the lack of an audit and yet they are standard disclosures.
All of this is to say that the risk that the business will fail is far higher than the risk that they are committing fraud. IMO
AXXA! Green Again
https://www.google.com/amp/s/www.wsj.com/amp/articles/ernst-young-says-it-isnt-responsible-for-luckin-coffees-accounting-misconduct-11594909084
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