[go: up one dir, main page]
Scribd
Upload
81 views2 pages

Audit Dispute in 2GO Scandal

The document discusses an accounting scandal between two audit firms, SGV and KPMG, and their client 2GO Group Inc. SGV had audited 2GO since 1977 but in 2013, 2GO hired KPMG after disagreeing with SGV over deferred tax assets. KPMG and SGV later reported different financial information for 2GO, with SGV claiming KPMG treated receivables too liberally and failed to communicate with SGV, the prior auditor. However, neither audit firm is accused of fraud—the issues seem to have stemmed from different judgments and a lack of coordination between the auditors.

Uploaded by

diane camansag
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
81 views2 pages

Audit Dispute in 2GO Scandal

The document discusses an accounting scandal between two audit firms, SGV and KPMG, and their client 2GO Group Inc. SGV had audited 2GO since 1977 but in 2013, 2GO hired KPMG after disagreeing with SGV over deferred tax assets. KPMG and SGV later reported different financial information for 2GO, with SGV claiming KPMG treated receivables too liberally and failed to communicate with SGV, the prior auditor. However, neither audit firm is accused of fraud—the issues seem to have stemmed from different judgments and a lack of coordination between the auditors.

Uploaded by

diane camansag
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Magbanua, Louvimnzcel R.

BSA- 39879

Vs .

2GO FIASCO
In a case where two respected audit firm is engaged in a scandal it is hard to choose who you
are going to side with. Personally, I don’t think the auditors would let their companies name be tainted.

The camp of former 2GO Group Inc. CEO Sulficio Tagud Jr. had a major disagreement with SGV
in 2013, 2GO’s External Auditor since 1977, over a deferred tax asset. 2GO hired KPMG- R.G. Manabat &
Co. the following year. This, I think is one of the reason that made this issue blew up. Tagum made it
looked like SGV did it on purpose to get revenge when they reported their audited Financial Statement.

The restated items in question in particular, the treatment of non- cash receivables on the
books, may have been treated liberally by KPMG and conservatively by SGV because of the different
roles they played in examining the firm’s books.

“We considered the recoverability of trade and other receivables as a key audit matter because
the determination of the allowance for doubtful receivables involves significant management’s
judgment and estimations,” SGV said.

The problem here is that they have used different valuation and different recognition that
resulted for them to report different amounts that made it looked like that there is a fraud or
misstatement. It’s not that I’m pointing fingers but the thing is as a courtesy procedure, when the
financial statements audited by an auditor is to be restated by another, the current auditor should at
least discuss and seek concurrence from the prior one, which the SGV auditors failed to do so.

Another thing is that the new owner, Dennis Uy, and SGV didn’t ask for 2GO’s management’s
authority before they audit the financial statement because they conducted the audit before 2GO was
acquired by the said businessman.
I don’t think SGV or KPMG committed a fraud. There’s just a misunderstanding because SGV
failed to communicate with KPMG. If there is in fact a fraud, then it is in the management alone and
don’t have anything to do with the said audit firms.

Summary:

= Facepalm

http://business.inquirer.net/233113/tagud-camp-airs-side-2go-accounting-fiasco/amp

http://business.inquirer.net/232954/clearer-picture-2go-accounting-issue-emerges/amp

https://www.manilatimes.net/2go-faces-p1-m-fine-misdeclaring-financial-statement/337923/

https://www.portcalls.com/2go-execs-claims-fraud-false-malicious/

http://www.bworldonline.com/content.php?section=opinion&title=the-2go-business-case-
study&id=149050

http://business.inquirer.net/232869/local-kpmg-unit-defends-2go-audit-seeks-info/amp

You might also like