According to a regulatory filing by MicroStrategy, PwC left on its own admission, declining not to renew its relationship into 2005. MicroStrategy officials insisted there were no outstanding disagreements over accounting issues or the financial reporting of results.
But some Wall Street analysts expressed concern over the move saying it would cause a delay in the company’s annual report filing.
One analyst pointed out increased skepticism in the investment community following the departure of MicroStrategy’s CFO Eric Brown in December and the resignation of two more directors in recent months.
A closed-door communications policy adopted by the firm at the start of this year also isn’t helping. The absence of any additional commentary over the matter over raises speculation as to why PwC is turning away MicroStrategy’s business.
McLean, Virginia-based MicroStrategy can’t really afford another financial hiccup given its already checkered past. The once high-flying firm unwittingly became the poster child for aggressive accounting in 2000 following a well publicized scandal which saw its stock freefall – dropping over 60% in a single day – after restating financial results that turned profits into losses.
Interestingly the findings of a private investigation released in August 2003 describe specific accounting misdeeds by both the company and PwC, its audit partner at the time.
Brown has been widely accredited with turning the company around since. He left to become CFO at security firm McAfee Inc.
MicroStrategy shares recovered slightly during the course of trading yesterday, down 11% to $63.07 in the midday Nasdaq session.
