I believe NMC, Inc. is proper in obtaining a new auditing firm.
As per Sarbanes-Oxley SEC Rules & Regulations Section 208-3,
Scope of Services Provided by Auditors
"When an accounting firm provides bookkeeping services for an audit client, the firm may be put in the position of later auditing the accounting firm's own work. If, during an audit, an accountant must audit the bookkeeping work performed by his or her accounting firm, it is questionable that the accountant could, or that a reasonable investor would believe that the accountant could, remain objective and impartial. If the accountant found an error in the bookkeeping, the accountant could well be under pressure not to raise the issue with the client if raising the issue could jeopardize the firm's contract with the client for bookkeeping services or result in heightened litigation risk for the firm. In addition, keeping the books is a management function, which also is prohibited."
Accordingly, since Pannell Kerr Forster (PKF) were the "Accountants" NMC, Inc. would be required to retain the services of a different "Auditing" firm in order to be in compliance.
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