The Princeton Review said Friday it has fired Ernst & Young LLP as its independent accounting firm, effective immediately, and replaced it with Grant Thornton LLP.
The provider of test preparation and educational support services stressed in a regulatory filing that in connection with the audits for each of the two most recent fiscal years and during the interim period through May 21, 2007, there were no disagreements between the company and E&Y on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure.
Princeton Review stressed in its regulatory filing that there were no “reportable events.” However, it did concede there were material weaknesses in internal controls over financial reporting in each of the two most recent fiscal years.
In 2006, these material weaknesses related to the financial statement close process, the collectibility of aged accounts receivable balances, revenue recognition for unusual or complex transactions, and accounting for certain embedded derivatives contained within the company’s convertible preferred stock. That last item also constituted a material weakness in 2005.
Princeton Review restated its balance sheets as of December 31, 2005 and 2004 and related consolidated statements of operations, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2005.
CFO Andrew Bonanni, who joined The Princeton Review in September 2005, resigned in January 2007. His predecessor, Steve Melvin, who had stayed on as executive vice president of finance, stepped back into the CFO slot while the company sought a permanent CFO.