Audit firms and their clients squabble over fees. It is known. But why does this happen? Simply, you can chalk it up to a difference of opinion — the audit firm believes it is providing a valuable service. The client disagrees.
Most audit firms are sensitive to this so they try to offer a reasonable rate for their services and hope the hours budget doesn't get blown. Unfortunately, this scenario never happens. The rate is often far too reasonable and the budget far too unreasonable. And sometimes when the budget is ludicrously unreasonable, you get a situation like the one between Chapman Hext and Core Resource Management:
The Audit Committee along with the approval of the Board of Directors of Core Resource Management, Inc. (the “Company”) completed a competitive process to determine what audit firm would serve as the Company’s independent registered public accounting firm for the year ended Decemeber [sic] 31, 2015. On August 23, 2015 the Audit Committee determined to dismiss Chapman, Hext & Co., P.C. (“Chapman Hext”) as the Company’s independent registered public accounting firm effective immediately due to billing that substantially exceeded the engagement agreement quote.
As an added bonus, the Auditor Carousel notes that prior to the dismissal, the two also disagreed over some non-GAAP information in the footnotes. The portion of the 8-K that discusses this is wonderfully passive-aggressive:
Although the Company disagrees with the judgment and rule interpretations, it will acquiesce to file such tabulations only within the MD+A sections of the 10-K and 10-Q reporting.
The company is now "aggressively" seeking a new auditor, presumably one that's more agreeable and less prone to overruns.