$45m approx net profit, page-2

Following on your points Charles11,

The very loose remuneration policy detailed in their accounts would have paid big bonuses and "guaranteed bonuses" on the back of this $45m "profit".

My fingers remain pointed at the Auditors along with management.


If the debtors collection policy was not so loose and as a result more questions were asked around revenue recognition this should have come out sooner.




Auditors responsibilities previously commented on last month!
http://www.hotcopper.com.au/post_single.asp?fid=1&tid=996182&msgid=5586794

A balance sheet is prepared at the date of 30 June.


Auditors do however have a responsibility to review events after the balance sheet date until the date which the audit report is signed (which was 30 Sep).

I think someone posted on NBS thread that accounts were rushed and audit report was signed 30/9. This could well be that the auditors were waiting as long as they could to gain comfort that the debtors were recoverable and no provision was required or that the revenue number should be revised down if the sales could not be validated by actual receipts this long after year end (or at least that no separate disclosure was required to the contrary stating the risk of non payment)

If no disclosure/provision made/adjustment to revenue which is in accounts versus what was shown on preliminary accounts then it indicates:
1. The auditors had reasonable assurance to satisfy themselves that the cash would be forthcoming
2. They may not have done their jobs as thoroughly as shareholders would like (IMO)