Business Context and Reporting Period
This Form 8-K filing by ONE Group Hospitality, Inc. is dated October 4, 2018. The report discloses a change in the Company's independent registered public accounting firm effective as of the report date.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity figures. It is a current report focused solely on corporate governance and auditor changes.
Material Changes
- Auditor Dismissal: Grant Thornton LLP was dismissed as the Company's independent registered public accounting firm.
- New Auditor Engagement: Plante & Moran, PLLC was engaged as the new independent registered public accounting firm for the fiscal year ending December 31, 2018.
- Audit History: Grant Thornton's reports for fiscal years 2016 and 2017 did not contain adverse opinions, disclaimers, or qualifications.
Outlook, Risks, and Contingencies
Internal Control Weaknesses: The filing discloses that during the specified period, Grant Thornton identified that the Company's internal control over financial reporting was not effective due to material weaknesses. These weaknesses included:
- Lack of a robust and effective financial statement close and reporting process.
- Ineffective controls over the accounting for income taxes.
- Improper segregation of duties.
- Design gaps in the information technology environment.
Disagreements: The Company reported no disagreements with Grant Thornton regarding accounting principles, practices, or auditing scope during the specified period.
Consultation: The Company did not consult with Plante & Moran regarding accounting principles or reportable events prior to their engagement.
Investor Verification Checklist
- Verify the status of remediation efforts for the disclosed material weaknesses in internal controls.
- Review the letter from Grant Thornton LLP (Exhibit 16.1) to confirm their agreement with the statements made in this filing.
- Monitor future filings for the impact of the auditor change on the audit opinion for the fiscal year ending December 31, 2018.