8-K: Horizon Kinetics Holding Corp. Changes Independent Auditor to CBIZ CPAs

Horizon Kinetics Holding Corporation replaces Marcum LLP with CBIZ CPAs as its independent auditor, effective April 28, 2025.

Summary

• Horizon Kinetics Holding Corporation (the Company) has changed its independent registered public accounting firm from Marcum LLP (Marcum) to CBIZ CPAs P.C. (CBIZ CPAs), effective April 28, 2025.
• The decision was approved by the Audit Committee of the Company's Board of Directors.
• Marcum's attest business was acquired by CBIZ CPAs on November 1, 2024, but Marcum continued to serve as the Company's auditor until April 28, 2025.
• The Company did not consult with CBIZ CPAs prior to their engagement regarding accounting principles or the type of audit opinion.
• Marcum's reports on the Company's financial statements for the fiscal years ended December 31, 2024 and 2023 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified.
• During the fiscal years ended December 31, 2024 and 2023, and through April 28, 2025, there were no disagreements between the Company and Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.
• Material weaknesses in internal control over financial reporting were identified during 2024 and 2023, and continued to exist at December 31, 2024.
• Marcum has provided a letter to the SEC agreeing with the statements made by the Company in the Form 8-K regarding their firm.

Sentiment

Score: 5

Explanation: Neutral sentiment as it primarily reports a change in auditors. The presence of material weaknesses is a concern, but the change itself is not inherently positive or negative.

Positives

• Marcum's audit reports for 2023 and 2024 did not contain any adverse opinions or disclaimers.
• Marcum agrees with the statements made by Horizon Kinetics Holding Corporation in the Form 8-K.

Negatives

• Material weaknesses in internal control over financial reporting were identified during 2024 and 2023 and remained at the end of 2024.
• These weaknesses relate to the review and consolidation of certain proprietary funds, timely account reconciliations, segregation of duties, and supervisory review of key controls.

Risks

• The material weaknesses in internal control over financial reporting could lead to errors in the Company's financial statements.
• The change in auditors could create uncertainty in the short term.

Future Outlook

The Company will work with CBIZ CPAs to ensure a smooth transition and to address the material weaknesses in internal control over financial reporting.

Industry Context

Changes in auditors are not uncommon, but it is important to understand the reasons for the change and to assess the potential impact on the Company's financial reporting.

Comparison to Industry Standards

• Auditor changes are a normal part of corporate governance, but the presence of material weaknesses in internal control is a concern.
• Companies like Enron and WorldCom faced similar issues with internal controls, which ultimately led to significant financial restatements and bankruptcies.
• It's important to compare Horizon Kinetics' internal control environment to industry best practices and benchmarks to assess the severity of the weaknesses.

Stakeholder Impact

• Shareholders may be concerned about the material weaknesses in internal control over financial reporting.
• Employees in the finance and accounting departments may be involved in the remediation of the internal control weaknesses.
• The change in auditors could impact the Company's relationship with its creditors and suppliers.

Next Steps

• CBIZ CPAs will conduct an audit of the Company's financial statements for the fiscal year ending December 31, 2025.
• The Company will work to remediate the material weaknesses in internal control over financial reporting.

Key Dates

Keywords

auditor, CBIZ CPAs, Marcum LLP, Horizon Kinetics Holding Corporation, accounting, financial reporting, internal control, audit committee