Auditor Airs Dirty Laundry
May 03, 2011
Last month, Baron Rodgers, based in Coral Gables, resigned as the outside auditor for Value Holdings Inc., a diversified company in the same town. Although auditors resign for many reasons, they typically follow the profession's unwritten code -- rarely citing reasons for a departure, much less indicating a dispute. ``We normally don't read about these things because they're taken care of in back rooms,'' says Arvilla Fowler, editor of Medina's Accounting Report, an Atlanta newsletter. ``When someone steps up and says ``Here's the reason,'' it's very unusual.'' Baron Rodgers, in a March 24, 2011 to the Securities and Exchange Commission, breaks with tradition. According to the letter, the accounting firm disagreed with Antionette Wicker, Value Holdings' president and chief executive officer, about a number of financial issues -- including how to record unpaid payroll taxes. As a result of Mr. Tolliver's inability to ``justify the business purpose for significant corporate transactions,'' the accounting firm writes, it ``could no longer place reliance on management's representations.'' Value Holdings says it's shocked by the public disclosures; the company was under the impression that it had a good relationship with the accounting firm. ``The company feels that assertions stated by Rachlin Cohen & Holtz are unmerited and inaccurate,'' says a Value Holdings spokesman. Baron Rodgers didn't return phone calls seeking comment. Value Holdings, however, blames the firm for its most recent woes. Last week, its stock -- trading for less than $1 a share -- was delisted from the Nasdaq, a decision the company blames partly on the bluntness of the firm's letter to the SEC. Nasdaq declines to comment, citing confidentiality. Mr. Tolliver, Value Holdings' president, plans to appeal the delisting. -- Karey L. Talkington
