Earlier today we learned that Deloitte resigned as the auditor of Daqing Dairy Holdings Ltd, a Hong Kong-listed Chinese company. It was notable because this is the second resignation for Deloitte in [counting on fingers] seven days! That's not good! The other one was "baby products maker" and licenser of Harry Potter and Bob the Builder-branded clothes, Boshiwa. Paul Gillis, who writes at China Accounting Blog doesn't like the looks of things and told Reuters, "That's two in a row now for Deloitte. If that trend continues it will start to raise some eyebrows." Well! This trend seems to have started about a year or so ago. You might remember China MediaExpress (March '11). Or Real Gold Mining (October '11). OR Longtop Financial (aka the workpaper hostage takers, May '11). All Deloitte clients.
But with two resignations in a week, one might conclude that this year of the dragon is also the year of the…resigning watchdog[?]. On March 15th, Gillis wrote, "[H]old on to your seat. I expect a few more of these in the next few weeks," without handicapping it or specifying the time frame. We'd like a little more detail with the predictions, so we invite him (and you) to do so in the comments. Which firm will have the most resignations by Memorial Day? Fourth of July? Labor Day? How many resignations will there be total? How many hostage situations will there be? Will the Chinese let the PCAOB conduct inspections for…all the tea in China? If so, how much tea is that? You're numbers people. Let's get some figures out there.
Deloitte quits second Chinese firm as auditor fears grow [Reuters]
