Description: The case against Sino-Forest Corp, the forestry company with the missing forests, is winding down more than a year and a half after it started. The founder of the company was accused of “gross breach of trust” for misleading investors. A board committee looking into the company’s disclosures has been unable to find the trees or even whether the so-called missing trees existed.
Date: April 18, 2016
1) Have you followed the Sino-Forest story? What do you know about this case?
2) The story mentions that without being able to prove the existence of the standing timber, you also can’t prove valuation or ownership. What procedures would an auditor of a timber company do to gather evidence on these three audit assertions?
3) The article tells us that the Sino-Forest troubles began when news broke that it might be a Ponzi scheme. How would you define a Ponzi scheme?