Audrey accounting practices criticized

Charges by a Montreal accounting professor that Audrey Resources (TSE) inflated earnings statements to entice investors have been denied by Audrey President Guy Hebert.

The Montreal Gazette, a Southam newspaper, reported that charges and countercharges have flown over the accounting practices of Audrey since publication of a 34-page report by Leo-Paul Lauzon of the University of Quebec at Montreal.

Lauzon details what he says was a systematic misrepresentation of Audrey’s financial health. Audrey, whose Mobrun polymetallic property near Rouyn-Noranda, Que., has been in and out of production during the past five years, recently reached an agreement with Cambior (TSE) to sell the latter a controlling interest in Audrey.

At the centre of the dispute are the profits the company reported in the late 1980s that became losses after Audrey completed a share issue in 1989. The Gazette says Lauzon was paid $3,000 to conduct the study by Jacques Forget, who is suing Audrey and its directors to recover a $2.5-million investment in the company.

Hebert accused Lauzon of making errors in his report and said the professor reported incorrect dates.