BEST BUY TO DISMISS E&Y: National electronics retailer Best Buy Co. said that it would dismiss its auditor, Big Four firm Ernst & Young, following the completion of the fiscal 2005 audit -- which ends Feb. 26 -- due to a conflict of interest with a company director.
According to a federal filing, Best Buy said that the decision to jettison E&Y as its independent accountant stemmed from the May resignation of Mark C. Thompson, a former board and audit committee member. Thompson resigned his post earlier this year after it was revealed that he had an arrangement with E&Y to provide services for $377,500, plus expenses.
Best Buy has not named a successor to Ernst, and is currently seeking proposals.
FANNIE MAE TAPS DELOITTE: Embattled mortgage-financing concern Fannie Mae selected Big Four firm Deloitte to succeed KPMG as its independent accountant.
Ironically, Deloitte is the audit firm that helped the Office of Federal Housing Enterprise Oversight -- the body that regulates Fannie Mae -- uncover accounting irregularities at the concern. As a result, Fannie Mae is restating its earnings from 2001 through mid-2004, which could potentially erase some $9 billion in earnings.
The scandal also prompted the ouster of Fannie Mae chairman and chief executive Franklin Raines and chief financial officer Timothy Howard.
PWC RESIGNS AS VERILINK AUDITOR: Big Four firm PricewaterhouseCoopers resigned as the independent accountant for Madison, Ala.-based Verilink Inc., a provider of Internet access products. No reason was given for the audit firm's resignation. Verilink has subsequently engaged Ehrhardt Keefe Steiner & Hottman as its new independent accountant.
There had been no disagreements between PwC and Verilink over any accounting matters.
NATROL HIRES STONEFIELD JOSEPHSON: Natrol Inc., a Chatsworth, Calif., based manufacturer of nutritional supplements and pharmaceuticals, has named Stonefield Josephson as its new independent accountant.
Stonefield replaces Big Four firm Deloitte & Touche, which was dismissed. The change in auditors was approved by Natrol's audit committee. According to an 8-K filing, Deloitte's reports on the company's financial statements for the two-year period ended Dec. 31, 2003, did not contain an adverse opinion, nor were there any disagreements with Deloitte on matters of accounting principles.
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