E&Y Terminates Audit Relationship Before Being Fired
This information is being reported by CFO.com and is purportedly based on information from a Health Risk Management press release.
Shortly after releasing Health Risk's financial statements and independent auditor's report for the fiscal year ended December 31, 2000, E&Y determined some miscalculations had been made regarding the company's medical services payable liability - miscalculations that, ultimately announced, may have caused the company's stock to plunge more than 39 percent to $4.75 per share.
The audit firm changed its tune a few days after the report was released, implying that there was no error with the way in which the liability account was reported. Then E&Y switched gears again and indicated the potential miscalculation could be as high as $2.8 million for the 2000 fiscal year, and another $2.2 million adjustment would be required for the first quarter, 2001.
Health Risk Management's Audit Committee voted to oust the confused auditors, but E&Y got to the table first and tendered its resignation.