CNA Group (5GC.SG) is off 17% at $0.32, as former auditor of company’s associate Standard Water warns of potential accounting irregularities, says Dow Jones.

CNA’s own financial results will be flawed if allegations true. DMG estimates CNA’s FY08 net profit at $6.2 million vs declared $6.4 million, “the impact to FY09 may even be bigger”.

House reviewing current “buy” call, 57 cents target. Pending outcome of investigations and appointment of new auditor for Standard Water to replace Ernst & Young China, share price likely to remain depressed.

CNA says Standard Water may have overstated its declared FY08 revenue of RMB404 million ($82.7 million) by RMB22 million.

Orderbook quotes suggest support at $0.275-$0.280.