8-K: Hanryu Holdings Appoints OneStop Assurance PAC as New Independent Auditor

Hanryu Holdings, Inc. has engaged OneStop Assurance PAC as their new independent registered public accounting firm, replacing BF Borgers CPA, PC.

Summary

• Hanryu Holdings, Inc. has appointed OneStop Assurance PAC as their new independent registered public accounting firm.
• This decision follows a competitive selection process conducted by the company's Audit Committee.
• The engagement letter from Onestop Assurance PAC is dated November 24, 2023, and was accepted by Hanryu Holdings on January 16, 2024.
• The audit will cover the balance sheet as of December 31, 2023, and the related statements of operations, comprehensive income, shareholders' equity, and cash flows for the year then ending.
• The estimated fee for the audit services is US$100,000, with a payment schedule of US$50,000 by December 31, 2023, and US$50,000 upon signing of the audit report.
• The previous auditor was BF Borgers CPA, PC, who audited the company's IPO.
• There were no disagreements with BF Borgers CPA, PC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

Sentiment

Score: 7

Explanation: The document reflects a standard business process of changing auditors. The process appears to be well-managed and transparent, with no indication of any issues. The sentiment is neutral to slightly positive.

Positives

• The company has completed a competitive selection process to choose a new auditor.
• There were no disagreements with the previous auditor, indicating a smooth transition.
• The engagement letter outlines clear responsibilities and procedures for the audit.

Risks

• The audit fee is estimated at US$100,000, which could be a significant expense for the company.
• The engagement letter mentions that fees may be adjusted if unexpected circumstances are encountered during the audit.
• There is a risk that material misstatements in the financial statements may not be detected by the audit.

Future Outlook

The company anticipates the audit to be completed in a timely manner, assuming cooperation from company personnel and no unexpected circumstances.

Management Comments

• The company's CEO, Mr. Chang Hyuk Kang, signed the acceptance of the engagement letter on January 16, 2024.
• The Board of Directors approved the nomination of OneStop Assurance, PAC on January 16, 2024.

Industry Context

The appointment of a new auditor is a standard practice for public companies and is often done to ensure independence and compliance with regulatory requirements. The selection process indicates a commitment to good corporate governance.

Comparison to Industry Standards

• The process of selecting a new auditor through a competitive process is consistent with industry best practices.
• The engagement letter details the responsibilities of both the auditor and management, which is standard for audit engagements.
• The fee structure and payment schedule are typical for audit services of this nature.
• The requirement for auditor independence is in line with SEC and PCAOB regulations.

Stakeholder Impact

• Shareholders will be informed of the change in auditors.
• The change in auditors is not expected to have a significant impact on employees, customers, or suppliers.
• Creditors will be assured that the company's financial statements will be audited by an independent firm.

Next Steps

• OneStop Assurance PAC will begin the audit of the company's financial statements for the year ending December 31, 2023.
• The company will provide necessary information and cooperation to the auditors.
• The audit report will be included in the company's annual report (Form 10-K).

Key Dates

Keywords

audit, auditor, financial statements, accounting, OneStop Assurance PAC, BF Borgers CPA, engagement, PCAOB, internal control