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Subprime Lender's Shares Surge Briefly on News of New Auditor

Shares of subprime lender Accredited Home Lenders Holding jumped after the company said that it had hired Squar, Milner, Peterson, Miranda & Williamson LLP as its independent auditor, replacing Grant Thornton, which resigned from the role last week.

Accredited shares surged 8.8% to $10.04 in electronic, pre-market trading but they gave back those gains once the market opened .

Chief Executive James Konrath said in a statement that Squar Milner would complete the audit of Accredited's 2006 financial statements.

Like other lenders to people with weak credit records, Accredited has been buffeted by increasing defaults. But the hiring of a replacement auditor was the latest piece of positive news for the company.

Last week Accredited announced several financings and said for the first time that it was considering a merger.

It previously said Grant Thornton had resigned after advising that it needed to "significantly expand" the scope of its audit. Grant Thornton said Accredited did not meet its "requirements for client acceptance."