8-K: Flanigans Enterprises Changes Accounting Firms: Marcum LLP Resigns, CBIZ CPAs Engaged

Flanigans Enterprises, Inc. announces the resignation of Marcum LLP as its independent registered accounting firm and the engagement of CBIZ CPAs, effective May 9, 2025.

Summary

• Flanigans Enterprises, Inc. announced that Marcum LLP resigned as their independent registered accounting firm on May 9, 2025.
• The resignation was prompted by CBIZ CPAs P.C.'s acquisition of Marcum's attest business on November 1, 2024.
• Following the resignation, the Audit Committee approved the engagement of CBIZ CPAs as the company's new independent registered public accounting firm, effective immediately for the fiscal year ending September 27, 2025.
• Marcum's reports on the company's financial statements for the fiscal years ended September 28, 2024, and September 30, 2023, did not contain any adverse opinions, disclaimers, or qualifications regarding uncertainty, audit scope, or accounting principles.
• There were no disagreements between Flanigans and Marcum regarding accounting principles, practices, financial statement disclosure, or auditing scope or procedures during the fiscal years ended September 28, 2024 and September 30, 2023, and through May 9, 2025.
• However, the company reported material weaknesses in internal control over financial reporting in previous filings, which were related to staffing, IT controls, and revenue recognition.
• Flanigans did not consult with CBIZ CPAs on accounting principles or potential audit opinions prior to their engagement.
• Marcum has reviewed the company's statements in the Form 8-K and agrees with the statements concerning their firm.

Sentiment

Score: 6

Explanation: The announcement is neutral, detailing a change in accounting firms. The previously reported material weaknesses are a concern, but the change itself is not inherently negative.

Positives

• Marcum's audit reports for the past two fiscal years did not contain any adverse opinions or disclaimers.
• There were no disagreements between Flanigans and Marcum on accounting principles or auditing procedures.

Negatives

• The company previously reported material weaknesses in internal control over financial reporting related to staffing, IT controls, and revenue recognition.

Risks

• The company has previously identified material weaknesses in internal control over financial reporting, which could pose a risk to the accuracy and reliability of financial statements.

Industry Context

Changes in accounting firms are not uncommon, especially following mergers or acquisitions within the accounting industry. Companies often seek to ensure a smooth transition and maintain compliance with regulatory requirements.

Comparison to Industry Standards

• The engagement of a new accounting firm following the resignation of a previous one is a standard practice in the industry.
• Companies like McDonalds, Starbucks, and Darden Restaurants also use large accounting firms and periodically change them.
• The disclosure of material weaknesses in internal control is also a common occurrence, and companies are expected to take steps to remediate these weaknesses.

Stakeholder Impact

• Shareholders should be aware of the change in accounting firms and the previously reported material weaknesses in internal control.
• Employees in the accounting and financial reporting departments may experience changes in processes and procedures as a result of the new accounting firm's engagement.

Key Dates

Keywords

accounting firm, Marcum LLP, CBIZ CPAs, resignation, engagement, audit, internal control, financial reporting