Ventas, a  real-estate investment trust based in Chicago, has fired the Big 4 accounting firm EY and its own chief accounting officer and controller after the discovery of an "inappropriate personal relationship" between the two cast suspicion upon two years of audit work.

Ventas has hired KPMG to re-audit its financial statements for 2012 and 2013 and review of its results for the first quarter of 2014. That move came after EY informed Ventas it was no longer independent and was withdrawing its audit opinions for those periods due to the uncovered srelationship. In the company's 8-K filing to announce the change in audit firm, Ventas says EY told the company that it was obligated under professional standards to withdraw its opinions and that its withdrawal was based solely on the inappropriate relationship, not because of any accounting issue, control concerns, or any other reason.

Ventas, in the 8-K filing, says the former CAO and controller, Robert Brehl, was released based on the  relationship and not because of any disagreement with the company over financial reporting, accounting operations, policies, or practices. The company says it believes its financial statements fairly present financial results, internal controls were effective during the affected periods, and that investors can continue to rely on the informtion provided to them. The company also noted that the senior EY partner on the Ventas account was not the same individual involved in the inappropriate personal relationship.

Richard Schweinhart, CFO and executive vice president, will assume Brehl's duties and oversee the re-audit work. He's also agreed to “modify and/or defer” his previously announced retirement plans to assure a smooth transition to new leadership. Debra Cafaro, chairman and CEO of Ventas, said in a statement that the company acted quickly when the relationship came to light. “When we learned of this isolated situation, we investigated the facts immediately, notified EY promptly, and took swift and decisive action,” she said.

EY, in statement, said the actions of the partner represented “a flagrant violation of our firm's code of conduct and professional standards.” EY declined to name the partner or explain the nature of the relationship. “Upon our learning of this matter, the partner was promptly terminated,” it said.

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