Crowe_Horwath_2c_lo.jpgCrowe Horwath either has some shrewd auditors working there or they need to work on their people skills because First Place Financial Corp. just kicked their asses to the curb over irreconcilable differences.
The whole thing came down to the “material weakness” versus “significant deficiency” debate you auditors love so much.
More, after the jump


From the 8-K:

On September 1, 2009, Crowe notified the Company that it was its opinion that the Company had not maintained effective internal control over financial reporting as of June 30, 2009. This was in contrast to Management’s opinion that it had maintained effective internal control over financial reporting as of June 30, 2009. After subsequent discussions, the disagreement remained. The essence of the disagreement concerns a single internal control weakness which resulted in an error in valuing loans held for sale as of June 30, 2009. Crowe determined that this internal control weakness was a material weakness while the Company determined that this internal control weakness was a significant deficiency.

The shitty control in question missed an error that overstated loans held for sale by $2.17 million and understated the net loss for fiscal 2009 by $1.41 million. Crowe said that this was cause for the material weakness and First said nonsense poopy-pants, it’s not material, so it’s a significant deficiency.
Well, it was obviously mule vs. mule because First Place’s audit committee ultimately decided that firing Crowe on Tuesday was the best course of action.
Maybe First Place are the assholes. WTFK, really? Whatever the problems, KPMG gets the pleasure now. If you’ve got any further information on this one, want discuss MW/SD (vomit) or just feel like speculating, discuss in the comments.
First Place Details Disagreement with Auditor [Business Journal Daily]