You Can't Be Serious

Deloitte & Touche resigned as the auditors of Longtop Financial, which appears to be yet another US listed Chinese company that turned out to be a complete scam. I found this disclosure to be most shocking:

(1) the recently identified falsity of the Company's financial records in relation to cash at bank and loan balances (and possibly in sales revenue)

What I found shocking is that it appears that auditors don't even know how to verify something as simple as cash in bank accounts in China. And this is not a fly by night auditor. An investment in any Chinese company requires a giant leap of faith if something as simple as cash in the bank cannot be verified properly.