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SHP's avatar

Any update on cakebox from yourside?

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DHC's avatar

On most of the stuff, I'd agree with you - but the stock control issues (plus the line regarding recording sales outside of cycle) are a little puzzling.

It was not a minor restatement either. GBP$1m is pretty material.

Don't think this is a fraud, but they have some serious internal control issues. We will see how much relatively soon, since a new CFO is in place.

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Blackswanshares's avatar

Hi DHC, there is that old saying " there is no smoke without fire" ... it seems to me that some mistakes were made, no doubt about that. But the previous auditor ( very thorough and demanding) still signed off the accounts, so I'm thinking not material enough. I think the valuation reflects all of that already.

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DHC's avatar

I'm with you, generally, and think this is more a q of how poor internal controls were vs this being a fraud, but I am not sure if relying on auditor sign off is the best. Auditors have a pretty poor track record when it comes to signing off on fraudulent accounts.

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Maynard Paton's avatar

Yes, only time will tell. Let's see. As I noted in the article, I may have been overly sceptical. Maynard

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Blackswanshares's avatar

Maynard, your input is appreciated. Unbelievable forensic detail, as with other pieces as well. So it's great to have your opinion even if it differs to mine.

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