Replies to post #38855 on California Grapes International, Inc (CAGR)

[whodis]

Let me help you out. The company you are familiar with is paying too much. Probably getting a kickback from the accounting firm. Good faith estimates of the costs can be found here:

Can Your Company Afford to Become (stay) a Public Company

Here are some excerpts:

"Audit Fees. Under both a Direct IPO and a reverse merger, the audit fees will be similar. In both situations the private company is required to have its financial statements for the last two fiscal years audited by an independent, registered accounting firm qualified with the Public Company Accounting Oversight Board (PCAOB), as well as have any stub periods since the end of its last fiscal year reviewed by the independent auditor. In situations where the company has not been in existence for two years, the company is required to provide audits and reviews for the period of time the corporation has been in existence. As mentioned above, these audit fees will vary company to company and audit firm to audit firm, but a good benchmark for a company’s 2 year audit is about $40,000 to $60,000, with the review of the applicable stub period costing an additional $5,000 to $7,500. Most auditors will also have a separate fee for reviewing the registration statement that will contain the audited and reviewed financial statements. This fee is typically between $2,500 and $5,000. Therefore, all told, a private company looking to go public through either a Direct IPO or a reverse merger should allocate around $50,000 to $75,000 for the audit, review of the stub period and review of the registration statement."

"Audit Fees. As mentioned above, the audit fees for public companies vary widely depending on many factors, but a good estimate is $40,000 to $50,000 for the year end audit, and $6,000 to $7,500 for each quarterly review, for a total of about $60,000 to $75,000 per year. If the company undergoes certain transactions, like an acquisition or files a registration statement, additional audit fees will be incurred.

[EXL]

I could not resist responding to this since I do audits for a living : $120K for an audit ??? Are you crazy ? Have you looked at their balance sheet ? The most it would be $20-$25K for the amount of info they have.

"The books have to be forensically reconciled to the other company's in 2006". First: Forensically reconciled ??? What does that even mean. Never heard of that ever.

Second, why does it to be traced to 2006 - you need audited statements for the past two-three years only that would mean 2010, 2009 and 2008. 2006 is way too far in the past.

Why this audit would cost only approx. $20-25K ? I will walk you step-by-step over each audit section:

Planning - Send arrangement letter - internal controls etc 25 hours
Cash - Send confirms for major accounts. Test outstanding checks if material. Max - 3 hours
AR - Send confirm to cover majority of the balance - max 2.5 hours
Inventories - Inventory counts and price testing - 5 hours
Property and equipment - test additions by pulling invoices - 2.5 hours
Non curren assets - send confirm to related parties - 2 hours
Current liabilities - perform search for unrecorded liabilities test. 2.5 hours
Equity - Test stock transaction on sample basis - 3 hours
Sales and COS - Test analytically - 3 hours
Operating expenses - 2 hours - analytical review.

Overall financial statement prep - 5 hours
Manager review - 15 hours
Partner review 5 hours
QC review - 2 hours.
Total 77.5 hours at an average of $250 per hour for a regional medium size accounting firm = approx. $20K.

sorry but I am not sure where you got $120K. You have no clue about this do you ? At least google it before you make such comments. thanks.

[Alyssa]

You should check out the history at the SEC site. What transpired is not rocket science and there is no evidence of any "HORROR" or "SLOPPY" messes. Oh the drama!

http://sec.gov/edgar/searchedgar/webusers.htm

[posilock]

prove the $120,000 to us??? show us something???? lol i thought so!!!