Business Context and Reporting Period
This Form 8-K Current Report was filed by Genie Energy Ltd. on August 20, 2019. The filing addresses a change in the Company's independent registered public accounting firm.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The report focuses exclusively on governance and audit matters rather than financial performance data.
Material Changes
- Dismissal of Auditor: The Audit Committee approved the immediate dismissal of Marcum LLP as the Company's independent registered public accounting firm.
- Appointment of New Auditor: The Audit Committee approved the appointment of BDO USA, LLP to serve as the new independent registered public accounting firm following a competitive bidding process.
- Historical Relationship: BDO had previously served as the Company's auditor from July 29, 2013, until July 6, 2018.
Management Commentary, Risks, and Contingencies
Internal Control Weaknesses: Management previously concluded that the Company did not maintain effective controls over the change management process and segregation of duties within applications used for customer enrollment, pricing, rebates, commissions, invoicing, and payments. These deficiencies constitute a material weakness in internal control over financial reporting.
Audit Opinion: Due to the material weakness, Marcum LLP expressed an adverse opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2018. However, Marcum's report on the consolidated financial statements for the year ended December 31, 2018, did not contain an adverse opinion, disclaimer, or qualification regarding the financial statements themselves.
Disagreements: The Company reported no disagreements with Marcum regarding accounting principles, practices, or auditing scope during the year ended December 31, 2018, or the interim period through August 20, 2019.
Investor Verification Checklist
- Verify the status of remediation efforts for the material weakness in internal controls over financial reporting.
- Review the attached letter from Marcum LLP (Exhibit 16.1) to confirm their agreement with the Company's statements regarding the dismissal.
- Monitor future filings for the transition plan and timeline for BDO USA, LLP to assume audit responsibilities.
- Assess the impact of the prior adverse opinion on internal controls on the Company's ability to issue timely and accurate financial statements.