8-K: Creatd Inc. Terminates Relationship with Independent Accounting Firm Turner Stone

Creatd Inc. has terminated its relationship with its independent registered public accounting firm, Turner, Stone & Company, LLP, effective June 25, 2024.

Summary

• Creatd Inc. has ended its engagement with Turner, Stone & Company, LLP as their independent registered public accounting firm.
• The decision was made by the Board of Directors on June 25, 2024, following a recommendation from the Audit Committee.
• Creatd Inc. has provided Turner Stone with a copy of the disclosures related to this change and requested a letter confirming their agreement with the statements made.
• Turner Stone has provided a letter to the Securities and Exchange Commission confirming their agreement with the statements made by Creatd Inc. regarding the termination.

Sentiment

Score: 5

Explanation: The document is neutral in tone, reporting a change in accounting firms. While not inherently positive or negative, such changes can sometimes raise concerns among investors.

Positives

• The company has followed proper procedure in terminating the accounting firm, including a recommendation from the Audit Committee and approval by the Board of Directors.
• Turner Stone has confirmed their agreement with the statements made by Creatd Inc. regarding the termination, indicating transparency and alignment on the facts.

Risks

• The change in accounting firms could potentially raise concerns among investors about the company's financial reporting and internal controls.
• There is a risk of disruption during the transition to a new accounting firm, which could impact the timeliness and accuracy of financial reporting.

Management Comments

• The Board of Directors unanimously voted to terminate the relationship with Turner Stone based on the recommendation of the Audit Committee.

Industry Context

Changes in auditors are not uncommon, but they can sometimes signal underlying issues or disagreements between a company and its accounting firm. Investors often scrutinize these changes for potential red flags.

Comparison to Industry Standards

• The process of changing auditors is generally governed by regulations and best practices, which Creatd Inc. appears to have followed by involving the Audit Committee and Board of Directors.
• Companies typically disclose the reasons for auditor changes, and while this document does not explicitly state the reason, the company has followed the required disclosure process.

Stakeholder Impact

• Shareholders may be concerned about the change in accounting firms and its potential impact on financial reporting.
• Employees in the finance and accounting departments may experience changes in their workflow during the transition to a new accounting firm.

Next Steps

• Creatd Inc. will need to engage a new independent registered public accounting firm.
• The company will need to ensure a smooth transition to the new accounting firm to maintain the integrity of its financial reporting.

Key Dates

Keywords

accounting firm, auditor, termination, Turner Stone, Creatd Inc., Audit Committee, financial reporting