Deloitte Dumped for 43 Percent Discount. A micro-cap company decides its Big Four auditor is too expensive.

一家市值只有 34 億台幣(US$102M)的美國小上市公司，因為小事務所出價僅有 Deloitte 的一半，決定當掉 Deloitte，改聘用一家 LA 的小事務所負責審計。Deloitte 去年的查帳費用大約是 3 千 3 百萬(US$1M)。

市值 34 億左右的上市櫃公司，是什麼樣的公司呢？以台灣來說，大約是台灣市值一千大排名四百五十名左右，倚天、佳必琪及大毅之類的公司。這樣的公司在台灣一年的給四大的審計公費可能連 5 百萬都不到。就算把物價水準差異考慮進去：假設以美國物價約台灣 3 倍來計算，以該小事務所的收費水準，公費至少也要有 5 百萬以上。但實際上台灣事務所收費比這個小事務所還低！

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Sarah Johnson

CFO.com US

January 9, 2008

When Catapult Communications Corp. made the uncommon decision to drop a Big Four accounting firm in favor of a local, smaller auditor, it also took the unusual step of announcing its reason for the switch: Deloitte & Touche, Catapult's auditor of the past two years, was simply not offering the right price.

By hiring Los Angeles-based Stonefield Josephson, Catapult estimates it will save 43 to 49 percent in accounting expenses this year, off the $985,000 the Mountain View, California-based company would have paid Deloitte for fiscal 2008.

Catapult claims the change in audit firms will create "significant savings ... without negatively affecting the quality of the audit and related services." Considering its relatively small size — $102 million in market capitalization — saving nearly half a million dollars was significant, Catapult's investor relations representative, Leigh Salvo, told CFO.com.

Catapult, which supplies telecom test systems to service providers like Alcatel-Lucent and Motorola, also was attracted by Stonefield's team, service offerings, and background, Salvo said. Practical Accountant ranked Stonefield 67th among accounting firms in revenue last year, with $40 million. The firm has four California offices, one Hong Kong location, and more than 100 employees.

It's not a surprise Catapult was looking for ways to cut expenses. The $39.3 million company reported a 17 percent drop in its revenue for fiscal-year 2007, which it blamed on the consolidation of its customers and increased global competition.

To be sure, Jeff Garrison, Stonefield's president, says cost savings isn't his firm's main selling point. Like most auditors, Stonefield touts its high-quality work. However, he told CFO.com the firm was able to offer a lower rate than Deloitte in part because its partners don't have to deal with as much bureaucracy and can make decisions sooner without having to check in with headquarters.

At the same time, Garrison acknowledges that a regional firm like his does not fit every company's needs. In general, large-cap companies prefer using a Big Four firm, and Stonefield may not have the technical, industry-specific expertise to handle the review of some companies' financials without relying heavily on affiliated firms.

In announcing the change in auditors, Catapult said it has had no unresolved disagreements with Deloitte during its two-year partnership — a fact the accounting firm agreed with in a letter accompanying Catapult's latest 8-K filing. Deloitte did not respond to CFO.com's request for comment by press time.

However, the relationship ended soon after Catapult addressed a material weakness in its internal controls. In its financials for the quarter ended September 30, 2007, Catapult announced it had resolved the outstanding weakness, which resulted in properly classifying variable rate demand notes during the previous year.