O.C. Software Firm’s Auditor Quits Abruptly
SAN JUAN CAPISTRANO — Shares of Wiz Technology Inc. tumbled 22% Thursday after the software company reported that its independent auditor had abruptly resigned without explanation.
Wiz said last week’s departure by the accounting firm Coopers & Lybrand did not stem from any disagreement with the company or any dispute over accounting matters. It was the second time in about a year that an outside auditor has dropped Wiz.
But this time, said Mar-Jeanne Tendler, the company’s chairman and chief executive: “We were quite surprised. There is absolutely no quarrel, no auditing dispute, no nothing.”
Tendler said Wiz is in sound financial shape and that she did not expect any delays in reporting its fiscal year-end results, which are due by the end of October. She said Wiz has been interviewing other auditing firms in the past few days and plans to retain one of them soon.
Hal Hurwitz, the Coopers & Lybrand partner who handled the Wiz account, did not return telephone calls Thursday. Other senior managers at the firm’s office in Newport Beach also could not be contacted.
Tendler blamed Wall Street’s reaction to the stock--which fell $1.188 to close at $4.25 a share on the American Stock Exchange--to a combination of the slide in the overall market and the news of the resignation.
“I’m not surprised. People don’t like changes,” she said.
It was 14 months ago that Wiz, which markets education, business and game software, retained Coopers & Lybrand after another auditor, Corbin & Wertz of Irvine, quit in a dispute over how to account for certain expenses.
That previous departure delayed Wiz’s release of financial results and resulted in a temporary halt in trading of the company’s stock. Tendler said Thursday that she has spoken with officials at the American Stock Exchange and that she expected no such disruption this time.
Tendler said she was at a complete loss as to what triggered the latest resignation. She said she was awaiting word from Coopers & Lybrand to renew its work when Hurwitz called Wiz on Aug. 21 to say he was dropping the account. Tendler said Hurwitz would not provide a specific reason for the action.
While such unexplained resignations are unusual, accounting firms have been dropping more clients in recent years, concerned about potential liability as an auditor. Earlier this month, Coopers & Lybrand abruptly dropped Chantal Pharmaceutical Corp. after the Los Angeles company’s chief financial officer quit and some market players questioned whether Chantal was actually earning the revenue it booked.
Wiz’s last quarterly report was issued in June and covered the three months ended April 30. In that fiscal third quarter, the 4 1/2-year-old public company reported strong gains, posting a profit of $272,975 on revenue of $2.7 million.
