Applix fires Ernst & Young as SEC probe continues

Published on 9/23/2003

Applix Inc., a maker of business software, said on Monday it fired Ernst & Young as its independent accounting firm and hired Deloitte & Touche instead as it faces a regulatory probe.

In June, Applix said it was being investigated by the U.S. Securities and Exchange Commission after it restated financial statements for 2001 and 2002 to address revenue from two customer agreements and to correct accounting issues associated with an acquisition.

Massachusetts-based Applix's chief executive Alan Goldsworthy resigned from the company in February, but the company did not give a reason for his departure at the time.

Applix said on Monday that during an audit of its 2002 financial statements, Ernst & Young had advised the company that the reports of some management members regarding a customer contract were unreliable.

Applix said in an SEC filing that it no longer employs those members of management, but did not provide names.

"The company believes it has addressed these internal control matters by implementing additional control procedures involving management's review and evaluation of contracts, contract signing authority and segregation of duties," Applix said.

Applix shares sank almost 3 percent on the Nasdaq on Monday, losing nearly 7 cents to close at $2.51.

Courtesy of Reuters