When Your Auditor Resigns, It is a Good Thing.
The story ripping around the internet is the AP story, picked up by Forbes, is USANA's auditor resigns for no reason
"The accounting firm for embattled Utah vitamin maker USANA Health Sciences Inc. has resigned, and the company insisted Tuesday that no disagreement led to the departure.That would be unusual, corporate watchdogs say. A Securities and Exchange Commission filing hints at a dustup over publicized findings by an independent fraud investigator, but USANA maintains it patched that up with accountants Grant Thornton LLP before the firm's departure."
No disagreement, but we cannot continue as your auditors. Yes, I think that would be unusual.
Zack Bissonnette who has been blogging about this story is also skeptical about the motives behind the resignation, USANA's auditor resigns for no reason - BloggingStocks
Zack followed up with an even more amusing story, Is-baghdad-bob-working-for-usana-health-sciences?
CFO also picked up the storyCFO Article on USANA, which contained slightly different language.
" Usana said that during Grant Thornton's review of unaudited financial statements included in the March 2007 quarterly report there had been a disagreement between the company's audit committee and the auditor about the scope of the procedures to be performed by the auditors, about the extent to which the audit committee should engage new, independent consultants to respond to accusations leveled against the company "by a third-party detractor."Usana did not identify the third party, but said that the company and its audit committee had deemed the third party's claims unfounded and unwarranted.
The disagreements between Grant Thornton and Usana had led to further discussions between the audit committee and the auditor, the company said, "which were resolved to the satisfaction of GT, the company, and the audit committee." The company also said that as a result of these discussions, the audit committee had engaged select advisers to provide advice on some of the allegations.
Usana said that Grant Thornton had completed its review of the first quarter 2007 financial statements, and that "the company has authorized GT to respond fully to any inquiries of a successor accountant." However, Grant Thornton did not provide a reason for resigning the account."
I read this as Usana admitting that Grant Thornton could only be satisfied by resigning the their retainer.
As part of their retainer, however, they could not comment on the reasons behind their resignation --except to respond to questions from the new accountants.
What do you think? Grant Thornton lost confidence in its client or not?
