A re-audit at Ventas Inc., the company that fired EY when it learned of an “inappropriate personal relationship” between its chief accounting officer and an audit partner, led to no new adjustments.
Ventas hired KPMG to re-audit financial statements for fiscal years 2012 and 2013 and when it learned of the relationship in mid-2014. KPMG’s re-audit did not result in any adjustments or changes to the company’s consolidated financial statements or footnotes for those fiscal years, or the related financial statement schedule, the company reported. KPMG also attested to the effectiveness of internal controls, the company says. “We are pleased that the re-audit was completed expeditiously and that KPMG has affirmed the reliability of our financial results and the effectiveness of our internal controls,” said Debra Cafaro, Chairman and CEO of Ventas, in a statement.
EY withdrew its 2012 and 2013 audit reports after determining the firm was not independent of the company due to the personal relationship. EY said the partner’s actions represented “a flagrant violation of our firm’s code of conduct and professional standards.” EY did not name the partner, but said the partner was terminated promptly. Ventas said the company’s then-chief accounting officer and controller, Robert Brehl, was released based on the relationship and not because of any disagreement over financial reporting, accounting policies, or practices.
Ventas is a real estate investment trust based in Chicago. The firm filed an amended 10-K reflecting KPMG’s clean audit opinion and praised both its team internally and KPMG staff for the expedited audit work. Ventas hired KPMG on July 9, so completed the re-audit of two years of financial statements in less than two months. The company is expecting to complete an acquisition of a healthcare trust in the fourth quarter of 2014.