Auditor Resignation

I've never seen this before - where a Big 4 auditor suddenly(?) resigns from
a fund (as opposed to the board changing auditors). Have I just been
oblivious to similar changes in other funds? Should this be treated as a
red flag?

"PricewaterhouseCoopers LLP has resigned as the independent
registered public accounting firm for the Fund effective June
'17, 2005. The Fund's Audit Committee has approved the'
engagement of KPMG LLP as the Fund's new independent registered
'public accounting firm for the fiscal year ending December 31' ...

"The reports of PricewaterhouseCoopers LLP ... for each of the
last two fiscal years contained no adverse opinion or disclaimer of
opinion ... There have been no disagreements with
PriceWaterhouseCoopers LLP during the Fund's two most recent
fiscal years and any subsequent interim period ...."



This is in an amendment to the semiannual statement, and gives no indication
of reason.
--
Mark Freeland

Re: Auditor Resignation

"Mark Freeland" <> wrote in message
news:GSkYe.200$
> I've never seen this before - where a Big 4 auditor suddenly(?) resigns
from
> a fund (as opposed to the board changing auditors). Have I just been
> oblivious to similar changes in other funds? Should this be treated as a
> red flag?
>
> "PricewaterhouseCoopers LLP has resigned as the independent
> registered public accounting firm for the Fund effective June
> '17, 2005. The Fund's Audit Committee has approved the'
> engagement of KPMG LLP as the Fund's new independent registered
> 'public accounting firm for the fiscal year ending December 31' ...
>
> "The reports of PricewaterhouseCoopers LLP ... for each of the
> last two fiscal years contained no adverse opinion or disclaimer of
> opinion ... There have been no disagreements with
> PriceWaterhouseCoopers LLP during the Fund's two most recent
> fiscal years and any subsequent interim period ...."
>
>

>
> This is in an amendment to the semiannual statement, and gives no
indication
> of reason.
> --
> Mark Freeland
>

Mark:

It's hard to tell without knowing the reason. Perhaps they just couldn't
agree on expenses or compensation. Although this is probably not public
information, I would think the fund holders would have a right to know the
reason. Even if they don't have a legal right, the fund administrators
would be wise to disclose this in the interest of dispelling the negative
impression that it inevitably lends.

If this were years ago, I would tend to assume that the fund was engaged in
something rather egregious. The many disclosures that we have had more
recently makes it clear that accounting firms were willing to bend over
backwards to accommodate their corporate clients in the hope of gaining
consulting work. With the death of Arthur Anderson perhaps they are being
more careful.

Do we know which fund it was? I would certainly like to know if it were one
of mine.

-herb

Re: Auditor Resignation

"Herb" <> wrote in message
news:YflYe.290652$
>
> "Mark Freeland" <> wrote in message
> news:GSkYe.200$
> > I've never seen this before - where a Big 4 auditor suddenly(?)
> > resigns from a fund (as opposed to the board changing
> > auditors). Have I just been oblivious to similar changes in
> > other funds? Should this be treated as a red flag?
> > [...]

> Mark:
>
> It's hard to tell without knowing the reason. Perhaps they just
> couldn't agree on expenses or compensation. Although this is
> probably not public information, I would think the fund holders
> would have a right to know the reason. Even if they don't have a
> legal right, the fund administrators would be wise to disclose this
> in the interest of dispelling the negative impression that it
> inevitably lends.
>
> If this were years ago, I would tend to assume that the fund was
> engaged in something rather egregious. The many disclosures
> that we have had more recently makes it clear that accounting
> firms were willing to bend over backwards to accommodate
> their corporate clients in the hope of gaining consulting work.
> With the death of Arthur Anderson perhaps they are being
> more careful.
>
> Do we know which fund it was? I would certainly like to know if
> it were one of mine.

Highly unlikely, unless you buy load funds or were grandfathered in about
decade(?) ago. These are Salomon Brothers funds.

Salomon funds have been somewhat merged with Smith Barney funds in the past
few years, and the recent development is that Citigroup agreed to sell the
business to Legg Mason (one week after PriceWaterhouseCoopers resigned) -
that might have something to do with this, e.g. some conflict of interest,
but then, as you wrote, you'd expect them to be upfront about it.

--
Mark Freeland