RE: RE: BULL SH&TI did 10+ years at PWC, so spare me that audit could not be completed on time. PWC is bound by professional "ethics" to supply copies of working paper files, etc to the new auditor of record. When KPMG became the new auditor they knew full well what to expect and budget their audit staff accordingly. Granted the KPMG office out of Toronto did the audit, and yes there would be a learning curve, but come on now, it's not like KPMG does not have a mining practice in Toronto. As HRG relates to Severstal HRG is not material to either their income or balance sheet.
I am not saying that KPMG may have concerns "issuing" a clean opinion, and that circumstance is not mentioned in the news release. The audit should be even easier as KPMG is also the auditor of record with Severstal. This means that the KPMG Toronto office can/should get information to/from Severstal much easier than when HRG was with PWC. In order to meet deadlines auditors would normally toss all living bodies at the audit, and inflate their billing by 2X because come hell or high water it looks bad...for everyone.
Folks, just remember to deduct the non HRG portions from these Unaudited numbers.
HMMM let's see
Looks to me like they can arrive at a revenue number,
Looks to me like they can arrive at a cost of goods sold number
Looks to me like they can arrive at a current and lt liabilities number
F/A history plus working papers
Purchases, payments payables cycle, should be a no brainer
Sales, receivable, cash, should be a no brainer
Investments, no brainer
Inventory should not be a problem
-Income statement yep should be a slam dunk, subject to OOOPS (See blow)
-Balance Sheet, yep should be a slam dunk subject to OOOPS (See below)
- NOTES OOOPS (See blow)
OOOOPS
My guess is KPMG did not like something they saw/uncovered/found and needs more time to exmaine what HRG booked, you remember a bunch of whacky stuff, write down this, write off that all at one time stuff. Possibly this did not fly (CICA,IFRS) when they wired the GL. Most of what HRG does is garden variety stuff for an auditor with a mining practice. What is difficult may be all the "fingers" of Severstal and how HRG wants to describe the accounting treatment. To be late for an audit opinion is a really thing, unless there is a really good explanation. What Severstal/HRG said is a white wash.
Lastly IF there are subsequent events like TROIKA, may have freaked out KMPG.
CJ