China Power Equipment (OTCCB:CPQQ) announced that it has upgraded to "Top Auditing Firm Mazars."  The announcement occurred concurrently with a bullish note from Rodman and Renshaw. 

In the body of CPQQ's PR, we learn that the company upgraded specifically from ACSB to Mazars CPA Limited, a Hong Kong affiliate of Mazars.  A cursory look at other names that Mazars CPA Limited audits raises questions as to whether this was much of an "upgrade." 

Biostar Pharmaceuticals (NASDAQ:BSPM) – Biostar Pharmaceuticals – 2.48

Changda Intl (OTCCB:CIHD) – Changda International Holdings – .830

Chinawe.com (OTCCB:CHWE) – Chinawe.com – .006

Chisen Electric (OTCCB:CIEC) – Chisen Electric – 4.70

Ticker not found - COL China Online International

Pacific Vegas Global (OOTC:PVEG) – Pacific Vegas Global Strategies –  .004

Physical Property (OOTC:PPYH) – Physical Property Holdings –  .001

Smartpay Express (OOTC:SPYE) – Smart Pay Express – .0201

Telestone Technologies (NASDAQ:TSTC) – Telestone Technologies – 8.20

http://pcaobus.org/International/Inspections/Documents/issuer_audit_clients_of_certain_non-US_firms_by_client.pdf 

If CPQQ wanted to upgrade, why would they upgrade to *this* auditor?  And why would they upgrade now, right in the middle of audit season?  One possibility is that they were having problems passing their current audit with ACSB.  The company claims that is not the case.

I'm a bit suspicious, however, because a similar January changeover to the same Mazars CPA Limited occurred last year at TSTC, a company with alleged accounting problems associated with a large A/R situation.

TSTC shifted from Mazars CPA Limited to QC CPA  on July 28, 2009.

http://www.sec.gov/Archives/edgar/data/817129/000114420409036941/v154620_8k.htm

Then, on January 14, 2010, TSTC shifted back from QC CPA to Mazars CPA Limited.

http://www.sec.gov/Archives/edgar/data/817129/000114420410002881/v171901_8k.htm

The question with respect to TSTC is, why would they shift from one auditor to another, and then shift back right in the middle of audit season?  Now, you have CPQQ shifting to the same auditor at a similarly late point in the audit season.  At a minimum, it looks bad, and so if CPQQ wanted to make an upgrade, they should have done so much earlier.