Veltex Corporation (VLXC)

[Growth And Value]

Audit provides more proof than you think

Miami, you must know something about how auditor's go about auditing a company don't you?

1) They send self addressed stamped envelopes out to all banks, all the people listed in the Accounts Receivable subsidiary ledger, etc, etc.

2) I have trust in accountant's because they get the information directly from the source, not from management. In my job I occasionally receive requests from auditor's to list A/R balances, A/P balances, credit references, etc. I sign with the understanding that I face criminal charges for erroneous information.

3) Auditor's have many tools available to them to go at numbers backwards and forwards. If things are not "reasonable" that would raise a red flag. I.E. A.R (Which is verified should be a certain percentage of sales). I've said before that VLXC's audits proved "reasonable" A/R to sales numbers.

4) Cash flow if a very effective tool.

Now, I'm sure you can bad mouth auditors and all of that, and audit's might not be perfect, but they can show actual bank balances, actual fixed asset purchases, actual A/R balances, and many other things that I don't have time to explain.