Real estate investment trust, Ventas, Inc. (NYSE:VTR), was up in the market on Thursday trading session by 0.40% closing the day at $64.60 despite announcing it had dismissed its auditor, Ernst & Young. Ventas was forced to dismiss Ernst & Young after the latter determined it lacked independence because of “inappropriate personal relationship” between one of E&Y partners and former Chief accounting officer and Controller.
David Faber on CNBC said the termination of E&Y will not have any effect on Ventas deals sentiments that were echoed by the company’s stock surging in the market. “Ventas are very active on the deal front. None of their deals is in danger in any way and, in fact, the stock is actually up this morning”. said Mr. Faber.
Ventas, Inc. (NYSE:VTR) announced on Wednesday that following the dismissal of E&Y as its auditing firm, its audit committee had appointed KPMG as its independent public accounting firm. E&Y had advised Ventas, Inc. (NYSE:VTR) that due to the inappropriate personal relationship it felt it was not independent. E&Y has consequently withdrawn all its reports on the company’s financial statements for 2012 and 2013.
“Apparently the former chief accounting officer and controller was having an inappropriate personal relationship with an E&Y Partner that was enough for Ernst & Young to say we can no longer audit you in the last two year. You have to get somebody else to come and verify them,” said Mr. Faber.
Ventas, Inc. (NYSE:VTR) on its part maintains that its financial statements present fairly accurate financial conditions, results of operations and cash flows as per the referenced dates. Ventas has already pointed out that the Senior E&Y partner on its account who signed the 2012 and 2013 audit reports was not an individual at the center of the unethical behavior.
KPMG has consequently been given the responsibility to complete a re-audit and re-review of all the relevant periods. Ventas, Inc. (NYSE:VTR) has confirmed it will devote all its resources to ensure KPMG completes its work on an expedited basis. It is still unclear whether, KPMG will reach the same conclusion as E&Y especially on accounting standards and meeting management estimates.