PwC Gives Up a $7 Million Audit Over a $105k Independence Conflict

Remember, kids, to check your independence at the door:

Logitech International (LOGI) (SIX: LOGN) (Nasdaq: LOGI) today announced a delay in the filing of its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2014.

As previously disclosed, Logitechs Audit Committee, with the assistance of independent advisors, conducted an independent investigation of certain accounting matters related to the Companys previously issued financial statements. The Company also disclosed that it will restate its financial statements for the Fiscal Year ended March 31, 2012, selected financial data as of March 31, 2012 and 2011, and unaudited quarterly financial data as of and for the quarter ended June 30, 2011 due to an accounting misstatement for inventory valuation reserves for Logitechs discontinued Revue product. With the investigation now closed, Logitech has been performing the necessary work to complete and file its Annual Report for Fiscal Year 2014 in Switzerland and its Annual Report on Form 10-K for Fiscal Year 2014 and Quarterly Reports on Form 10-Q for the first and second quarters of Fiscal Year 2015 in the United States.

Recently, unrelated to the Audit Committees independent investigation, Logitechs independent registered public accounting firm in the United States, PricewaterhouseCoopers LLP (PwC (PWESF)), brought an issue regarding its independence to the attention of the Company and the Audit Committee. The issue is based on non-audit, software consulting services provided by PwC to the Company during Fiscal Year 2015, which were contracted for in June 2014 for $105,000 and begun in August 2014.

Based on their current view of the matter and their interpretation of the SECs requirements for independence, PwC and Logitech currently believe that PwC remains independent and has maintained the requisite objectivity with respect to the financial periods covered by Logitechs Fiscal Years 2012, 2013 and 2014 financial statements and internal control over financial reporting as of March 31, 2014, as well as the financial statements for the first quarter of Fiscal Year 2015. In consideration of the specific facts and circumstances related to this situation, PwC informed Logitech on Nov. 6, 2014 that it has concluded it is not independent with respect to the second quarter of Fiscal Year 2015. The Company continues to work with PwC to file its Annual Report for Fiscal Year 2014 in Switzerland and its 10-K for Fiscal Year 2014 and 10-Q for the first quarter of Fiscal Year 2015 in the United States as soon as possible and is currently pursuing its options with respect to the second quarter of Fiscal Year 2015 and subsequent periods.

Was it worth it, guys?

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