Chinese mobile Internet service provider NQ Mobile Inc. (NYSE: NQ) has had its ups and (more often) downs since last October. Shares collapsed again last Thursday, falling more than 32% on word that the chairperson of the company’s audit committee has stepped down and that NQ Mobile’s outside auditing firm is expanding of its review of the company’s 2013 financial statements.

The company’s American Depositary Shares (ADSs) lost more than 60% of their value following the October report by short seller Muddy Waters, tumbling from around $25 to below $10 in just a couple of days. The report put a Sell rating on the stock with a price target of zero.

NQ Mobile has yet to file its 2013 annual report, and that combined with the audit committee chair’s departure and an expanded review by the outside auditor, PricewaterhouseCoopers Zhong Tian, could indicate that the auditors and the board of directors are at odds.

An analyst for another short seller told Bloomberg:

Her resignation tells me there was probably disagreement and possibly bad blood between the board and the auditors. I believe PwC smells something fishy. At the very least, they’re making sure all the bases are covered.

In early June an investigative team created by NQ Mobile reported, “The Investigative Team did not find any evidence that the Company had engaged in the fraudulent conduct alleged by Muddy Waters.” The ADSs jumped 30% on the day of the report to close at around $10.

NQ Mobile stock closed at $4.58 on Thursday, down 32.25% on the day. From the 52-week high of $25.90, the ADSs are down nearly 80%.

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