Software firm Peregrine has fired its Big Five auditor. Again.
The San Diego-based firm fired Andersen less than two months ago – one of more than 500 firms that has done so this spring. KPMG was hired to replace Andersen, but now that firm too has been fired.
Peregrine has announced it will restate its financial statements from the past 11 quarters to correct accounting errors representing approximately $100 million in revenue that was improperly booked. About $35 million of that revenue relates to transactions with KPMG and KPMG Consulting.
Peregrine sold software to KMPG's consulting unit which then resold the code to its clients. Many of these transactions occurred prior to KPMG Consulting's divestiture from KPMG. Concerned that the transactions violate auditor independence requirements of the Securities and Exchange Commission, as well as Generally Accepted Accounting Principles, Peregrine removed KPMG from the job.
In firing KPMG as its auditors, Peregrine stated that the termination "was not as a result of any disagreement on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure." PricewaterhouseCoopers (PwC) has been hired to help Peregrine issue the restated financial reports, however Peregrine is continuing to search for a new independent auditor.
Peregrine also indicated that federal regulators have begun a formal investigation into its accounting. Earlier this spring it was announced that the company's chief executive officer and chief financial officer had resigned.
Peregrine makes software that tracks physical assets. The company's stock, which was valued at $80 per share only two years ago, closed Tuesday at $1.34 per share, having lost almost 90 percent of its value in the past six months.