The following material weaknesses have been identified and included in management\'s assessment.
(1) Ineffective controls over review of U.S. Generally Accepted Accounting Principles (US GAAP) financial statements. Management engaged a third party service provider during the year to prepare consolidated financial statements and identify adjustments for preparation of financial statements in conformity with US GAAP. Both the outsourced third party service provider and management failed to identify all necessary GAAP adjustments. As a result, certain adjustments of a material level were recorded in the December 31, 2010 financial statements and reflected in reported results.
(2) Ineffective controls over monitoring of the adequacy of accruals over payroll-related expenses at the hog companies. Certain hog production companies in China have not accrued sufficient payroll-related expenses related to their farmer employees who reside in certain rural areas. As such, a material adjustment was recorded to accrue for the under-provision of such expenses.
In our opinion, because of the effect of the material weaknesses described above on the achievement of the objectives of the control criteria, AgFeed Industries, Inc. has not maintained effective internal control over financial reporting as of December 31, 2010. (McGladrey & Pullen, LLP)
This company is overdue with their latest quarterly or annual report! The Trading China Rating is suspended until the company is back in compliance with SEC filing rules.
This company has reported corporate governance issues. You may want to look further into possible issues before making an investment decision.