April 3 (Reuters) - Spruce Point Management said on Wednesday it has taken a short position in Montreal-based engineering and professional services firm WSP Global, citing "business stress" evident by its "increasingly opaque financial reporting".

Shares of WSP fell nearly 5% to C$209.99 after the short-selling focused investment management highlighted a long-term downside risk of 25% to 50%, or about C$110.00 to C$165.00 per share.

Spruce Point said WSP, which has bought 22 companies totaling $4.3 billion since 2020, was facing challenged margins and high employee turnover.

"WSP's adjusted results are highly dubious and ignore multiple ordinary and necessary costs," the short seller said in a report about the company that provides services in transportation, infrastructure and energy end markets.

WSP was not immediately available for comment.

Spruce Point also alleged that WSP has made revenue reporting "more opaque", and a recent change in revenue recognition policy allows the company to defer reporting cost increases and inflate margins in the current period.

It also said WSP's free cash flow conversion for 2023 could be closer to 38%, far below the 110% it had promoted. (Reporting by Ananta Agarwal in Bengaluru; Editing by Shinjini Ganguli)