IBC JETTISONS KPMGFinancial holding company International Bancshares Corp. said that its audit committee has dismissed KPMG as its auditor and replaced the Big Four firm with McGladrey & Pullen.
The Laredo, Texas-based company emphasized that the dismissal was not related to any disagreement with KPMG over accounting principles or practices, financial statement disclosures, or auditing scope or procedures.
IBC chief executive Dennis E. Nixon said in a statement that his board's audit committee believed it would be "better served by using McGladrey to audit the company's financial statements."
In the wake of the turmoil in the mortgage industry, he added that IBC is not involved in sub-prime mortgage lending and has no exposure in its investment portfolio to sub-prime mortgages. The company does hold mortgage-backed securities, but Nixon said that those were all either fully guaranteed or issued by the U.S. government and were rated AAA. IBC's total assets have dipped, however, from $10.9 billion on Dec. 31, 2006, to $10.4 billion as of June 30.
BANK MUTUAL TO PART WAYS WITH ERNST & YOUNG
Bank Mutual Corp., a provider of financial services for the state of Wisconsin, said that it would dismiss its independent auditor, Big Four firm Ernst & Young, upon the filing of its 2007 annual report.
According to a federal filing, Ernst & Young's reports for 2005 and 2006 didn't contain any adverse opinions, and there weren't any reported disagreements between the auditor and client over accounting practices in those two years.
Bank Mutual's audit committee said that it appointed Deloitte & Touche as its new independent accounting firm beginning in fiscal 2008, subject to shareholder approval.
PWC RESIGNS IRIDEX
Iridex Corp., a Mountain View, Calif., developer of laser treatment systems, said that PricewaterhouseCoopers has resigned as its independent accountant.
According to a filing, the Big Four firm notified Iridex that the company had inadequate end-of-period review procedures to ensure the accuracy of some accounts. As a result, PwC said that there were incorrect entries recorded for fiscal 2006. The auditor's report on the company's 2006 financial results included a paragraph expressing substantial doubt about Iridex's ability to continue as a "going concern."
