8-K: DIH Holding US, Inc. Changes Independent Auditor from Marcum LLP to BDO AG

DIH Holding US, Inc. has dismissed Marcum LLP as its independent auditor and engaged BDO AG, effective March 12, 2024.

Summary

• DIH Holding US, Inc. dismissed Marcum LLP as their independent registered public accounting firm on March 12, 2024.
• Marcum had been the company's auditor since May 2, 2022, and will continue to provide services related to the audit of Aurora Technology Acquisition Corp. through December 31, 2023.
• The audit reports from Marcum for the year ended December 31, 2022, did not contain any adverse opinions or disclaimers, but included an explanatory paragraph about the company's ability to continue as a going concern.
• There were no disagreements with Marcum on accounting principles, financial statement disclosure, or auditing scope, except for a previously disclosed material weakness in internal control over financial reporting.
• On the same day, March 12, 2024, the Audit Committee engaged BDO AG as the new independent registered public accounting firm.
• BDO had previously served as the auditor for DIH Holding US, Inc., a Nevada corporation, before the business combination with Aurora.
• The company did not consult with BDO on accounting principles or audit opinions during the two most recent fiscal years and the subsequent interim period through March 12, 2024.

Sentiment

Score: 6

Explanation: The change in auditors is a neutral event, but the previously disclosed material weakness and going concern note temper the overall sentiment.

Positives

• The transition to a new auditor was completed without any reported disagreements on accounting or auditing matters with the previous auditor, Marcum LLP.
• Marcum will continue to provide services to complete the audit of Aurora Technology Acquisition Corp. through December 31, 2023, ensuring continuity in the audit process.

Negatives

• The company had a previously disclosed material weakness in its internal control over financial reporting, which was noted in the 2022 annual report.
• Marcum's audit report for 2022 included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.

Risks

• The change in auditors could potentially introduce some disruption or additional costs during the transition period.
• The previously disclosed material weakness in internal control over financial reporting could pose ongoing risks to the accuracy and reliability of financial statements.

Management Comments

• The company has authorized Marcum to respond fully to the inquiries of BDO, as the successor independent registered accounting firm.

Industry Context

Changes in auditors are not uncommon, especially after mergers or acquisitions, and this change appears to be a routine transition following the business combination with Aurora Technology Acquisition Corp.

Comparison to Industry Standards

• The change of auditors is a common practice in the corporate world, especially after a merger or acquisition, and the transition from Marcum to BDO is not unusual.
• Both Marcum and BDO are reputable accounting firms, and the transition should not raise concerns about the quality of the audit.
• The disclosure of a material weakness in internal control is not uncommon, but it is important for the company to address this issue to ensure the reliability of its financial reporting.

Stakeholder Impact

• Shareholders may be concerned about the previously disclosed material weakness in internal control and the going concern note, but the change in auditors itself is not necessarily a negative event.
• The transition to a new auditor may require some additional effort from the company's finance and accounting teams.

Next Steps

• BDO AG will begin its role as the new independent registered public accounting firm.
• The company will likely work to address the previously disclosed material weakness in internal control over financial reporting.

Key Dates

Keywords

auditor, accounting, Marcum LLP, BDO AG, financial reporting, audit, internal control, going concern