Wednesday, April 1, 2009

PwC is Out as Overstock's Auditor

A recent Form 8-K filed by, the internet retailer, says that the audit committee of the board has dismissed PricewaterhouseCoopers llc as the company's independent registered public accounting firm.

The form doesn't say much as to why they have parted ways, unless this counts: "In 2008 the Company and Audit Committee discussed with PwC the existence of a material weakness in the Company’s internal control over financial reporting and disclosure controls and procedures...." Overstock has since concluded that it has "remediated" that material weakness as of December 31, 2008.

PwC has signed off on this account. "We agree with the statements concerning our firm in such Formn 8-K," it says in a brief statement attached as an exhibit to the Overstock filing.

Grant Thornton is stepping into the shoes of PwC now. Good luck to them.

A change in auditors can be a sign of underlying troubles. That is not an original observation of mine. It comes from, inter alia, the New York State Society of CPAs">.

I have, by the way, no position in any individual stock at all. My modest nest egg is invested in broad-based equity indexes. Furthermore, I am not now or ever giving stock advice. Anyone who makes investing decisions based on what they see in a blog is ... well ... presumptively imprudent.

My only previous mention of Overstock in this blog concerned the settlement of some litigation in which they were the plaintiff. You can find more discussion of this very intriguing company's history in my other blog.

So all I will say to conclude is that it is possible that in months to come the switch in auditors in March 2009 will be seen as a milestone.

No comments: