Business Context and Reporting Period
This Form 8-K Current Report was filed by Turning Point Brands, Inc. (TPB) on March 7, 2025. The filing addresses a significant corporate governance event: the change of the Company's independent registered public accounting firm.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity metrics. It is a disclosure regarding auditor changes and internal control matters rather than a financial results report.
Material Changes
- Dismissal of Auditor: The Audit Committee and Board of Directors dismissed RSM US LLP as the independent registered public accounting firm effective March 7, 2025. RSM had served the Company since before its 2016 IPO.
- Appointment of New Auditor: KPMG LLP was appointed as the new independent registered public accounting firm for the fiscal year ending December 31, 2025, effective immediately.
- Reason for Change: The Board determined that engaging a new firm was appropriate as the Company has grown and evolved, necessitating a review of auditing needs.
Outlook, Risks, and Contingencies
- Material Weakness in Internal Controls: The audit report by RSM US LLP dated March 6, 2025, indicated that the Company did not maintain effective internal control over financial reporting as of December 31, 2024. This was due to a material weakness related to ineffective information technology general controls (specifically user access and program change-management) over systems supporting financial reporting.
- Impact of Weakness: The filing states the material weakness did not result in a restatement of financial statements for the prior two fiscal years.
- Disagreements: There were no disagreements between the Company and RSM US LLP regarding accounting principles, practices, or auditing scope during the fiscal years ended December 31, 2024 and 2023, other than the noted material weakness.
- Consultation with New Auditor: No consultations occurred with KPMG LLP regarding accounting principles or audit opinions prior to their appointment.
Investor Verification Checklist
- Verify the status of remediation efforts for the material weakness in IT general controls disclosed in the 2024 Form 10-K.
- Confirm the transition timeline and scope of work between RSM US LLP and KPMG LLP.
- Review the attached letter from RSM US LLP (Exhibit 16.1) to ensure they agree with the Company's statements regarding the dismissal.
- Monitor future filings for any updates on the effectiveness of internal controls over financial reporting.