Except from CRY’s Form 8-K filing: The Audit Committee of the Board of Directors (the "Audit Committee") of CryoLife, Inc. (the "Company") has completed a competitive process to review the appointment of the Company's independent registered public accounting firm for the fiscal year ending December 31, 2013 ("fiscal 2013").
The above made it sound like they were doing this for “competitive” reasons. CRY made it sound like they were doing this as part of their fiduciary duty to be good stewards of company cash (e.g. to save shareholder money). But think about this for a moment.
Deloitte & Touche did the accounting for the 1st, 2nd, and 3rd quarters of 2012. Then they were dismissed at year end. Is CRY going to save any money by dismissing Deloitte & Touche who has years of cumulative audit history (and to whom CRY has already paid for three quarters of accounting work)? IMO this is unlikely. So instead, at year end, CRY switches to Ernst & Young. Ernst & Young then has to come up to speed on the prior year (CY 2011) and come up to speed for all of CY2012. Then they have to prepare the CY 2012 financial statements. I WOULD LOVE TO SEE THE ACCOUNTING INVOICES FOR ALL OF THIS. This catch-up work had to cost a lot of money, probably far more than CRY is apt to ever save in future years. Also, accounting work is always more expensive at a calendar year end, so if you are looking to save money you would not make the change at year end. Rather it would seem far more logical to make the change during the first, or second, quarter of CY2013, effective for CY2013.
The more a person thinks about this, the more something stinks. Did CRY dismiss Deloitte & Touche? Or, did Deloitte & Touche dismiss CRY? One has to wonder about whether there was some accounting issue, of such magnitude, that Deloitte & Touche would rather lose the audit than bend to CRY pressure. Something happened here. IMO, CRY is withholding the real story from shareholders.