Business Context and Reporting Period
Company: Where Food Comes From, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: December 5, 2019
Reporting Period: The filing addresses events occurring on December 5, 2019, regarding the change of the independent registered public accounting firm for the fiscal year ending December 31, 2019.
Key Financial Metrics
This filing does not contain standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The only financial data disclosed relates to audit fees:
- Audit Fee Trend: Audit fees and audit-related fee expenses increased approximately 88% from 2017 to 2018 following the appointment of the previous auditor, Crowe, LLP.
Material Changes Versus Prior Period
The primary material change reported is the dismissal of the independent registered public accounting firm:
- Dismissal: Crowe, LLP was dismissed effective immediately on December 5, 2019.
- Engagement: Causey Demgen & Moore P.C. was engaged as the new independent registered public accounting firm for the year ended December 31, 2019.
- Reasoning: Management stated the change is intended to be more cost-effective without sacrificing quality and to support local business.
- Disagreements: There were no disagreements with Crowe regarding accounting principles, practices, or audit scope during 2018 or the period through December 5, 2019, except for material weaknesses in internal control over financial reporting previously reported in the 2018 Form 10-K.
Guidance, Outlook, and Risks
Management Commentary: The Audit Committee completed a competitive process to select the new firm. The company believes the new appointment will reduce costs compared to the previous arrangement.
Risks and Contingencies: The filing notes the existence of material weaknesses in internal control over financial reporting that were reported in the annual report for the year ended December 31, 2018. No new risks or contingencies were disclosed in this specific report.
Unusual Items: The filing includes a letter from the former auditor, Crowe, LLP (dated December 9, 2019), indicating their response to the disclosures made in this report.
Important Facts for Investor Verification
- Verify the specific reasons for the 88% increase in audit fees between 2017 and 2018.
- Review the 2018 Form 10-K to understand the nature and status of the material weaknesses in internal control over financial reporting.
- Confirm the terms of engagement and fee structure with the new auditor, Causey Demgen & Moore P.C.
- Check the attached Exhibit 16.1 (Letter from Crowe, LLP) for any additional context regarding the dismissal.