Symbol Technologies Inc. announced that it dismissed Deloitte & Touche LLP, its independent auditor of 17 years, replacing it with Ernst & Young LLP, subject to shareholder approval.

Manhattan law firm Bernstein Litowitz Berger & Grossmann LLP, which led a class-action lawsuit against Symbol over accounting improprieties, has now also filed suit against Deloitte, according to Newsday. The new lawsuit, filed last week in federal court, alleges that the auditor “knowingly or recklessly issued false and misleading audit reports” of Symbol.

A Deloitte spokesman said his firm hadn’t seen the suit and so couldn’t comment to Newsday. Dan Berger, a partner at Bernstein Litowitz, confirmed to the newspaper that his firm was in settlement negotiations with Symbol; the bar-code company declined to discuss the subject.

Symbol, which is being investigated for its accounting practices over the five years beginning in 1998, gave no reason for dismissing Deloitte. The company stressed in a filing with the Securities and Exchange Commission that Deloitte’s audit reports for the 2002 and 2003 years did not contain an adverse opinion or a disclaimer of opinion and “were not qualified or modified as to uncertainty, audit scope, or accounting principles.”

Symbol’s SEC filing also noted that Deloitte reported to the company’s audit committee several instances of material weaknesses in connection with the audit of the 2002 financial statements, according to Reuters. They included a decentralized accounting structure for Symbol’s U.S. operations; inadequate policies to identify complex nonstandard transactions; errors in revenue recognition; and inadequate hiring, training, and supervision of qualified and experienced personnel, according to press reports.

The filing also detailed a disagreement between Symbol and Deloitte regarding the accounting treatment in 2002 for a security investment that, maintained Deloitte, should have been recognized in 2001. Symbol went on to state that “this accounting matter was resolved, [and] the company revised the accounting treatment for this investment and reissued its 2002 financial statements in an amended filing” of its 2002 annual report.”

Jim Conboy, Symbol’s chief accounting officer, said that the company had addressed all the material weaknesses noted by Deloitte and had either implemented or was in the process of addressing those that remained, reported Newsday.