Hall of Shame


Wowjoint Holdings (BWOWF US)

Year: 2013

Wowjoint, a Chinese company, is a leading provider of customized heavy duty lifting and carrying machinery used in such large scale infrastructure projects as railway, highway and bridge construction. Wowjoint's main product lines include launching gantries, tyre trolleys, special carriers and marine hoists.  The company listed pn the NASDAQ in May 2010.

From 2009 until 2012, the company accelerated revenue recognition on a number of projects by accruing for costs that had not yet been incurred. This allowed Wowjoint to recognize 100% of the revenue on those projects even though the underlying machines had not been completed. There was a questionable relationship with a contract co-party which collected revenue for Wowjoint but it then failed to remit proceeds in a timely manner, resulting in a large and overdue receivable. No charges were filed by the SEC against Wowjoint but its auditors, Sherb & Co., were suspended in 2013 from auditing companies before the SEC [1].


Public Company Accounting Oversight Board : Report on the auditor, 31 Mar 2011
[1] SEC: Accounting and Auditing Enforcement, 6 Nov 2013
SEC: SEC Charges Audit Firm and Four Accountants for Failures in Audits of China-Based Companies, 7 Nov 2013
Wowjoint Holdings: Annual Report 2013
Wowjoint Holdings: Annual Report 2010