-auditing 2 years financials is a major undertakin

-auditing 2 years financials is a major undertaking for pinks-who focus more on fundamentals than the office end-thus its pretty normal to take a year or 2 to complete the tasks.

marianothis Member Profile marianothis

Thursday, December 15, 2011 9:10:21 AM
Re: grajekk post# 60154
Post # of 60408
graj,

Great article, ty.

I have been asked privately about the tax audit CWRN just completed (Bob certainly wouldn't truck ore to the port w/o an export license, common sense imo) but instead of posting privately I decided to answer the questions here.

Q1) How is the Mexican audit related to a GAAP audit.

First off, I have NO experience with Mexican audits, tax or accounting. I am a former auditor with Deloitte & Touche. I have international experience too. The difference between any foreign audit (in this case a Mexican tax audit) & GAAP audit is never a significant difference. The reason is because accountants everywhere know GAAP & what adjustments need to be made to get the foreign fins GAAP compliant. That written the Mexican audit was probably done by the Mexican gov't or an approved Mexican CPA firm imo.

Q2) Is the Mexican tax audit a full audit ?

I don't know. But speculating I think the audit was probably significant if it wasn't a full blown audit. Mexico is interested in getting their "fair share" of the profits so the only way to do that is a significant or full audit. No way around this imo. Therefore the adjustments needed to become GAAP compliant would be small imo & more importantly well known.

Q3) What would the audit cost ?

I am confident that Bob hired an accounting firm that will do both the Mexican & US audit. The cost will also probably be in the tens of thousands of dollars too for each of the two years. My old firm wouldn't touch an audit for under $25k as exposure with an audit could be significant so the cost is too.

Q4) Would the US auditors ask for more info ?

Yes, definately. Auditors seem to ask unlimited questions (so we are told). Auditors feel the need to justify (as any consultant would) their fee.

My feeling is that the US audit is complete or extremely close to it....