China Sun Group Hi-Tech Co. (CSGH)

[Ecomike]

When CGYV switched auditors the stock price dropped about 80% while everyone waited for Deloitte to do the annual reports (they immediately, once hired, refused to use the prior 2 years audits as the basis for the current year), and the stock nose dived, while Deloitte took nearly a year to come out with a report that said opps, the prior 2 years were better not worse, sorry mr. investor.

I will not hold a stock that begins the process of changing or even discussing changing auditors just to say "look I have a top 4 audit". Also top four auditors are no long the answer, just look at the ones that Deloitte bailed on recently!!! Like Longtop, CCME,

http://www.nytimes.com/2011/05/27/business/27norris.html?pagewanted=all

http://af.reuters.com/article/commoditiesNews/idAFL3E7LD2O820111013

http://digicha.com/index.php/2011/05/longtop-teaches-deloitte-how-to-discover-a-chinese-stock-fraud-again/

In each of those three cases — Longtop, China MediaExpress and ShengdaTech — the auditors discovered discrepancies, but only after signing off on financial statements. That was not the case in this year’s other — and perhaps most embarrassing — resignation by a Big Four auditing firm.

In December, KPMG was retained by China Integrated Energy, which claimed to be a leader in the production of biodiesel. Just hiring a Big Four auditor enabled it to raise $24 million from institutional investors in the United States. Three months later, KPMG certified the financials.

Six weeks after that, KPMG repudiated the report and resigned. By then, China Integrated Energy executives had refused to cooperate with a board investigation into claims that the company was a complete fraud.