philo: Ernst & Young resigned. The fact of the matter was that in previous years E&Y of Canada had done the audits. However, to save money, the audit for FY 2003 was transferred to the San Diego office of E&Y last year. The US branch of E&Y was ratified as the certifying accountants at the 11/2002 ASM. The San Diego office was the one that resigned.
e.Digital did not fire them to save money. That was the attempted spin, but that was not the fact was as is shown in the 8-K e.Digital filed or even in what they said in the web cast.
Auditor resignation is a HUGE red flag which is required to be reported on form 8-K within 5 days. They did as much damage control as they could.
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