Business Context and Reporting Period
This Form 8-K Current Report was filed by Genie Energy Ltd. on July 5, 2018, with the earliest event reported on that date. 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 document focuses exclusively on governance and audit matters rather than financial performance data.
Material Changes
- Dismissal of Auditor: On July 6, 2018, Genie Energy Ltd. dismissed BDO USA, LLP as its independent registered public accounting firm, effective immediately. The Audit Committee approved this dismissal on July 5, 2018.
- Appointment of New Auditor: On July 6, 2018, the company appointed Marcum LLP as its new independent registered public accounting firm following a competitive bidding process.
- Audit History: BDO's reports for the years ended December 31, 2017, and 2016 did not contain adverse opinions, disclaimers, or qualifications. There were no disagreements between the registrant and BDO regarding accounting principles or auditing scope during the relevant periods.
Outlook, Risks, and Contingencies
Internal Control Weaknesses: The filing details historical material weaknesses in internal controls over financial reporting identified by BDO between September 2016 and September 2017. These included:
- Inadequate review and approval over schedules used to record cost of revenues (remediated by December 31, 2016).
- Ineffective controls regarding the completeness and accuracy of domestic and foreign income tax computations (identified as of December 31, 2016).
- Ineffective controls over the application of U.S. GAAP related to estimating weather impact on unbilled revenue (identified for periods ending March 31, June 30, and September 30, 2017).
Remediation Status: Management and the Audit Committee confirmed that all material weaknesses described above were successfully remediated by December 31, 2017. The company has authorized BDO to respond to inquiries from Marcum LLP regarding these matters.
Investor Verification Checklist
- Verify the transition timeline and scope of work between BDO USA, LLP and Marcum LLP.
- Confirm the status of the remediation of internal control weaknesses as of the most recent reporting period.
- Review the attached letter from BDO (Exhibit 16.1) to ensure the auditor agrees with the company's statements regarding the dismissal and lack of disagreements.
- Monitor future filings for any new material weaknesses or disagreements with the new auditor, Marcum LLP.