11-04-2013, 06:32 AM
There's not necessarily an implication that NQ's accounting is less than conservative, but rather a question as to whether its high DSO is characteristic of the collection cycles it faces or if there's a collection problem, or revenue fabrication as MW asserts. In NQ's defense AsiaInfo was cited as another company whose DSO's were typically high due to long collection patterns with the carriers it does business. The mgt has previously stated that they've been working with the carriers, etc. through many cycles without any collection issues, but still they recognize a need to reduce the DSO, and are focusing on doing so.
It's unlikely that PWC would have signed off on the financials if there were a material problem with collections. However, Deloitte is going to have a go at it also, and so there'll be a second independent opinion in due time. The fact that NQ is sitting on a pile of cash also speaks to their ability to collect on receivables.
It's unlikely that PWC would have signed off on the financials if there were a material problem with collections. However, Deloitte is going to have a go at it also, and so there'll be a second independent opinion in due time. The fact that NQ is sitting on a pile of cash also speaks to their ability to collect on receivables.