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Auditing

Grant Thornton insists client remove Chairman, is removed as auditor

Here’s an interesting story coming out of Dallas:

Embattled multi-level marketing firm Mannatech has fired its independent auditor, Grant Thornton, after the auditor gave the company an ultimatum: Remove Chairman and founder Sam Caster from the company or find yourself another auditor.

So they found themselves another auditor, BDO Seidman, and let Grant Thornton go. The strange thing is this part of their press release:

There were no disagreements between Mannatech and Grant Thornton on any accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

It’s hard to imagine why GT would insist the company dump their Chairman, given the above quote. But it makes no mention of internal control or corporate governance at the company, which may have caused some concern:

Caster stepped down as CEO in August. His decision came a month after the Texas Attorney General filed a lawsuit charging Mannatech, Caster and other parties with illegally marketing and selling its dietary supplements as a way to cure and treat diseases, illnesses or serious conditions like cancer.

The company has made a concerted effort to fix the problems that led to the lawsuit, including updating their sales and marketing materials and guidance for employees. With adequate monitoring, solidifying procedures and policies and setting expectations should ensure Mannatech recovers in the future.