Another AFR article, page-500

ASX and ASIC, as well as others, will have a litany of accounting and disclosure issues to deal with, numerous safeguards designed to protect shareholders have failed here:

- cash accounting and how the board, management and auditors signed off on cash numbers when two-thirds were really security deposits. A first year auditing graduate is taught that security deposits are not cash, they show up as a movement on the cash flow statement and are recorded on the balance sheet as other receivables, as either current or non-current based on when the security conditions lapse and the cash is then available for use by the company
- the disclosure and accounting for the never ending series of option grants particularly to non-directors / employees which seem to have been used to understate expenses and cash payments, as well as the ones which appear to have been issued to companies created by the accounting firm linked to the Ponzi scheme (I think but to be honest the information about all the option grants are mind boggling and could involve significant legal fees to properly unravel)
- the disclosures or lack thereof relating to FC Capital - which is related to the cash point and possibly the option point
- the composition of the board. With a board composed of the founder, his dad's girlfriend and chaired by his dad's mate, why were there no independent directors who may have asked an uncomfortable question or two well before it was left to some journalists.
- the disclosure of viewer numbers and whether there is evidence of inaccurate reporting
- the back-door listing process itself. I have long heard that ASX and ASIC have been concerned about the quality of some of the companies using back-door listings to get around the full due diligence committee requirements of a proper listing.
- the use of the term 'customers' when at best it appears that they were nothing more than 'leads'
- how brokers can unquestioningly take information from management to slap large price targets on it without any application of the 'trust, but verify' principle
- whether Standard & Poors need to review their methodology for inclusion in the S&P ASX300 to include criteria such as a minimum number of independent directors on the Board so that companies like this can't spruik themselves to a size for inclusion without proper oversight

These are just the ones which are apparent to me having only really started to look into BIG yesterday. I'll be reviewing my own portfolio with a fine toothed comb to see if there are any time-bombs like this sitting in there.