Winston-Salem, N.C. (Sept. 14, 2004) — Consumer favorite Krispy Kreme Doughnuts Inc. said that its auditor, Big Four firm PricewaterhouseCoopers, has refused to complete a review of the company's financials for the latest quarter until an outside law firm hired by the Krispy Kreme board is finished with "certain additional procedures" requested by the audit firm.

According to The Wall Street Journal, the doughnut operator and franchisor said that the procedures were related to an acquisition made during the company’s last fiscal year.

The chain, based here, is already the subject of an informal inquiry by the Securities and Exchange Commission that centers on repurchases of its franchisees as well as a stern profit warning that it issued in May.

The company’s audit committee retained a law firm at the end of August to "perform an investigation regarding a specific matter relating to an acquisition in fiscal 2004."

The acquisition in question was not disclosed.

— WebCPA staff

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