Form 8-K/A for CHINA IVY SCHOOL, INC.

19-Sep-2008

Non-Reliance on Previous Financials, Audits or Interim Review, Financial

ITEM 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

The Registrant changed accountants on June 23, 2008, retaining Michael T. Studer CPA, P.C. ("Studer"), as its new independent accountant (please refer to the Report on Form 8-K filed with the SEC on June 26, 2008, incorporated by reference herein). Following its retainer, Studer reviewed the Registrant's March 31, 2008 Form 10-Q, and advised Registrant on or about August 8, 2008 that the Registrant's sale and leaseback of real property in March 2008 had not been properly recorded in its consolidated financial statements. Additionally, the Registrant had inadvertently failed to accrue unpaid March 2008 salaries and consulting fees for the period ended March 31, 2008. Registrant's Officers discussed the matter with Studer and continued working to resolve the issue. The Officers concluded as of August 19, 2008, based on their evaluation and upon recommendations from Studer, that the Company's unaudited interim consolidated financial statements for the quarterly period ended March 31, 2008 should not be relied upon and should be restated. On September 11, 2008 the Officers recommended to the Board of Directors that Registrant should file an amended Report on Form 10-Q for that quarterly period. As of September 12, 2008, Registrant's Board of Directors authorized the filing of an amended Report on Form 10-Q.

In its amended Report on Form 10-Q, the restated consolidated financial statements will be modified to reflect the fair value of the receivable due from the sale of the real property, to adjust cash flows, income and expenses in relation to the revised treatment of the sale, and to adjust accruals to reflect the above-listed salaries and fees. The restated consolidated financial statements will further reflect the treatment of the leaseback of the property as an operating lease. Specifically, the restatement will reduce consolidated assets, liabilities and stockholder's equity by $21,356,179, $15,437,025 and $5,919,154, respectively. The restatement will also negatively affect net income by $5,793,558.

The Company reasonably believes, as of the time of this filing, that further analysis will not reveal additional errors which would have a material impact upon previously issued financial statements. However, its amended Report on Form 10-Q will note that its disclosure controls and procedures were not effective for the financial period stated.

A copy of the foregoing disclosure was provided to Studer, together with a request for it to provide to the Commission a letter stating its agreement with the disclosure, or stating the respects in which it does not agree. Studer's letter is attached hereto as Exhibit 99.1.

ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS
Exhhibit 99.1. Correspondence from an independent accountant regarding its agreement with statements of Registrant.

Forward-Looking Statements

Forward-looking statements in this 8-K/A are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include the statements regarding potential errors in previously issued financial statements; the nature, magnitude and scope of potential errors and the Company's investigation and analysis of such potential errors. These statements are predictions reflecting management's current judgment and involve risks and uncertainties, such that actual results may differ significantly. These risks include, but are not limited to, additional actions resulting from the Company's continuing internal review, as well as the review and audit by the Company's independent auditors of restated financial statements, if any, and actions resulting from discussions with or required by the Securities and Exchange Commission, along with other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for fiscal year 2007 and the Company's Quarterly Reports on Form 10-Q for subsequent quarters. The Company disclaims any obligation to update any forward-looking statements.