Lions Gate Fires Auditor After Criticism

Lions Gate Entertainment Corp. fired auditor PricewaterhouseCoopers after the accounting firm questioned some ways in which the company books revenue.

The Vancouver, Canada-based producer of films and television shows said in documents filed with U.S. and Canadian securities regulators that its board asked PricewaterhouseCoopers to resign July 24, after the firm finished its audit for the fiscal year ended March 31.

Lions Gate will nominate Ernst & Young as its new auditor at an annual meeting Sept. 12, the filing said.

PricewaterhouseCoopers told Lions Gate that it doesn’t have “effective” procedures for determining when revenue from international sales should be recorded, according to the filing. Lions Gate’s accounting department also needs more training, in PricewaterhouseCoopers’ opinion.

“While internal control over systems was adequate, lack of timely monitoring controls over systems output and accounting entries, such as reconciliations of account balances, analysis and review of transactions, balances and adjustments, may have contributed to a number of adjustments,” Lions Gate said it was advised by PricewaterhouseCoopers.

The auditors weren’t able to determine whether the matters raised related only to “significant events” during the year ended March 31. The filing didn’t say whether there were accounting issues in other years.

Officials from Lions Gate and PricewaterhouseCoopers declined to comment. PricewaterhouseCoopers had been Lions Gate’s accountant since November 1997, the company said.