Business Context and Reporting Period
This Form 8-K was filed by Wayside Technology Group, Inc. on July 25, 2018. The report discloses a change in the registrant's certifying accountant and provides context regarding the company's internal control over financial reporting as of the most recent fiscal periods.
Key Financial Metrics
This filing does not contain specific financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses exclusively on governance and accounting firm transitions.
Material Changes
- Accountant Change: On July 25, 2018, the Audit Committee dismissed EisnerAmper LLP as the independent registered public accounting firm and appointed BDO USA, LLP for the fiscal year ending December 31, 2018.
- Audit History: EisnerAmper's audit reports for fiscal years 2016 and 2017 contained no adverse opinions, disclaimers, or qualifications.
- Disagreements: The company reported no disagreements with EisnerAmper regarding accounting principles, practices, or audit scope during the relevant periods.
Outlook, Risks, and Contingencies
Internal Control Weaknesses: The filing references material weaknesses in internal control over financial reporting identified as of December 31, 2017, which remained applicable as of March 31, 2018. These weaknesses include:
- Deficiencies in applying technical accounting guidance for earnings per share calculations (remediated in Q3 2017).
- Issues with the classification of certain balance sheet accounts.
- Inadequate management review of third-party service providers regarding state income tax filings.
- Lack of documented policies for intercompany accounts with foreign entities.
Consultation with Successor: The company confirmed it did not consult BDO USA, LLP regarding accounting principles or reportable events prior to their appointment.
Investor Verification Checklist
- Verify the reasons for dismissing EisnerAmper LLP beyond the stated lack of disagreements.
- Review the status of remediation efforts for the four identified material weaknesses in internal controls.
- Examine the letter from EisnerAmper LLP (Exhibit 16.1) to confirm their agreement with the company's disclosures.
- Monitor future filings for the impact of the new auditor on the fiscal year 2018 financial statements.