Accredited Home Lenders Holding Co. (NASDAQ:LEND) said Tuesday that it has engaged Squar, Milner, Peterson, Miranda & Williamson, LLP as its independent public accountant. Accredited's prior auditor, Grant Thornton LLP, resigned abruptly early last week amid reports that it had prepared a "going concern" opinion on the troubled San Diego-based subprime lender. Squar Milner will begin work immediately to complete the audit of Accredited's financial statements for the year ended December 31, 2006, the lender said in a press statement. “We are very pleased to welcome Squar Milner as our independent auditors," said James Konrath, chairman and CEO at Accredited. "The firm brings a wealth of expertise, talent, and resources which includes auditing more than 30 public companies that include a number of NASDAQ-listed companies and clients doing business in all 50 states and in 51 countries. "Equally important is their experience in auditing non-prime mortgage companies and the extensive and local resources that will be dedicated immediately to the task of completing the audit of our 2006 financial statements." Former auditor Grant Thornton resigned April 2 from its duties at both Accredited and fellow subprime lender Fremont General amid allegations that the auditor was looking to "expand the scope" of its initial financial inquiry into each lender's operations.
In the case of Fremont, Grant Thornton said the company had failed to provide it with the information is was seeking in order to complete its audit of the company; no such claim was made in terms of the company's resignation from Accredited, although the "going concern" opinion is widely seen as the reason for Grant Thornton's departure. A so-called "going concern" opinion is widely regarded by financial markets as a harbinger of bankruptcy and/or insolvency. "If the former auditor had questions about Accredited as a going concern, hopefully the new auditor isn't overlooking the work that led them to that point," said one source, on condition of anonymity. "And hopefully, they'll have the fortitute to render an accurate opinion, whatever it may be." Sources at the time Grant Thornton resigned had suggested to HW that the former auditor was looking into secondary market pricing strategy and associated transactions at both Fremont General and Accredited. Neither representatives at Accredited nor at Squar Milner returned calls seeking comment on whether the new auditor would seek the same "expanded" inquiry that preceded Grant Thorton's resignation.
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