RE: I'm wondering about even the new auditors now- how long does it take to verify whether $12 million is either there or gone?
I believe we are all assuming that part of PWC's tasks include issuing an opinion on financial statements for the 4 years of 2006 through 2009, which includes the 3 years for which the opnions were withdrawn by M&B. As such, PWC must do far more than simply verify $12 million cash -- their opinions attest to the accuracy of the entire financial statements, and as such, they must perform complete audits of each year, which will include planning the audit, reviewing all major agreements and transactions, testing transactions, confirming balances, researching issues and analyzing supplemental schedules and explanatory notes for accuracy and completeness under GAAP and SEC requirements. If M&B is cooperating, PWC may be able to use M&B's files and documents to save some initial organizational time, but PWC must still perform sufficient auditing procedures to form their own opinion.
The standard time allowed by the SEC for completing an annual audit and filing the 10-K for companies EGMI's size is 90 days, and given the limited reliance on internal controls and lack of internal audit assistance it generally requires most of this time to complete. In EGMI's case PWC has 4 years of activity and reporting to work through.
Sorry to say this, but under the circumstances the bottom line answer to your question about how long to verify...? -- if everyone cooperates we can probably measure it not in days but in months.
AI
