Business Context and Reporting Period
This Form 8-K Current Report was filed by Collegium Pharmaceutical, Inc. on April 15, 2016, covering events occurring on April 11, 2016. The filing addresses a change in the Company's independent registered public accounting firm.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on corporate governance and audit matters.
Material Changes
The primary material change reported is the dismissal of Grant Thornton LLP as the Company's independent registered public accounting firm and the simultaneous appointment of Deloitte & Touche LLP for the fiscal year ending December 31, 2016. Both actions were approved by the Audit Committee.
- Dismissal: Grant Thornton LLP was dismissed on April 11, 2016.
- Engagement: Deloitte & Touche LLP was appointed on April 11, 2016, subject to normal client acceptance procedures.
Management Commentary, Risks, and Contingencies
Management reported no disagreements with Grant Thornton regarding accounting principles, financial statement disclosures, or auditing scope during the fiscal years ended December 31, 2015 and 2014, or the interim period through April 11, 2016. Grant Thornton's reports for 2014 and 2015 were unqualified.
However, the filing discloses historical material weaknesses in internal control over financial reporting identified during the preparation of 2014 financial statements for the Company's IPO. These included:
- Inadequate segregation of duties regarding journal entries, cash disbursements, and employee compensation.
- Deficiencies in controls over complex accounting matters, including debt, equity transactions, and income taxes.
- Issues with the financial statement close process regarding the cut-off of accrued expenses.
Management believes these material weaknesses were remediated during the fiscal year ended December 31, 2015. No consultations with Deloitte regarding accounting principles or reportable events occurred prior to their appointment.
Investor Verification Checklist
- Verify the content of the Auditor Letter (Exhibit 16.1) from Grant Thornton to confirm their agreement with the statements in this filing.
- Review subsequent filings to confirm the completion of Deloitte's client acceptance procedures.
- Examine the Company's most recent 10-K or 10-Q to validate the remediation of the previously disclosed internal control material weaknesses.
- Confirm that no undisclosed disagreements or reportable events exist between the Company and the former auditor.