SiliconBeat

Catapult Communications went shopping for a new accounting firm over the holidays and found one whose services were more than 40 percent cheaper than its recently dismissed vendor, Deloitte & Touche, according to a Friday filing.

“The reason for the change was to attempt to reduce the expenses that (Catapult), as a
relatively small public company, has been incurring in connection with the annual audits of the Company’s financial statements and the related internal control work.” Ah yes, internal control work, the gift from the Sarbanes-Oxley legislation of 2002 that keeps on giving.

True, the new firm isn’t considered one of the Big Four of the international accounting world. (When we started tracking this stuff in the mid-80s, of course, there were the Big Eight. Then Six. Then Five.) PricewaterhouseCoopers and Ernst & Young each currently represent about 70 valley companies, with KPMG and Deloitte & Touche each working for about 30.

But it seems Catapult’s bill from DT was $1,076,000 for fiscal 2007, or about twenty percent of its operating cash flow that year. Even with a reduction this year Catapult estimated that DT’s bill would be about $985,000 for fiscal 2008.

And so, on Dec. 28 the company named Stonefield Josephson as its new outside bean counters. It estimates that the move will save it anywhere from $420,000 to $480,000 a year in auditing fees.

And no, there weren’t any other reasons for the dismissal of Deloitte & Touche, Catapult
assured the SEC. Its filing included a brief letter from its former accountants that said that it agreed that it had no disagreements with Catapult’s accounting.

By our reckoning that makes Catapult the fifth Silicon Valley public company to be represented by Stonefield Josephson, a California based firm that also checks the books of four other valley companies: Alliance Fiber Optic, Digital Video Systems, NeoMagic and Tripath.

We last took a look at who did the books for Silicon Valley’s companies back in 2001 in the wake of the Enron debacle, which brought down the accounting powerhouse Arthur Andersen. At that time there were but a handful of smaller accounting firms outside the (then) Big Five auditing local public companies. Today we count 17.