8-K: Jerash Holdings Changes Accounting Firms: Engages CBIZ Following Marcum LLP's Resignation

Jerash Holdings (US), Inc. announces the resignation of Marcum LLP as its independent auditor and the engagement of CBIZ CPAs P.C. effective March 25, 2025.

Summary

• Jerash Holdings (US), Inc. has announced a change in its independent registered public accounting firm.
• Marcum LLP resigned on March 24, 2025.
• CBIZ CPAs P.C. was engaged as the new independent registered public accounting firm on March 25, 2025, with the approval of the Audit Committee.
• The change was prompted by CBIZ's acquisition of Marcum's attest business on November 1, 2024.
• Marcum's reports for the fiscal years ended March 31, 2024 and 2023 did not contain any adverse opinions or disclaimers.
• There were no disagreements between the Company and Marcum on accounting principles or practices.
• Material weaknesses in the Company's internal control over financial reporting had been previously disclosed.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While there's a change in auditors, it's due to an acquisition, not necessarily performance issues. The disclosure of prior internal control weaknesses is a concern, but it's already known.

Positives

• Marcum's audit reports for fiscal years 2023 and 2024 did not contain any adverse opinions or disclaimers.
• There were no disagreements between Jerash Holdings and Marcum on accounting principles or practices.

Negatives

• The company previously identified material weaknesses in its internal control over financial reporting related to period-end financial reporting and IT general controls.

Risks

• The previously identified material weaknesses in internal controls could pose a risk to the accuracy and reliability of financial reporting.
• The transition to a new accounting firm could present challenges in maintaining consistent financial reporting practices.

Industry Context

Changes in accounting firms are not uncommon, especially following mergers or acquisitions within the accounting industry. Companies are required to disclose such changes to maintain transparency with investors.

Comparison to Industry Standards

• The disclosure of a change in accounting firms is standard practice and aligns with SEC regulations.
• Companies like Nike, Adidas, and Under Armour also use external auditors, and changes in auditors are publicly disclosed through similar filings.
• The disclosure of previous material weaknesses in internal controls is also a common practice to inform investors of potential risks.

Stakeholder Impact

• Shareholders should be aware of the change in accounting firms and the previously disclosed material weaknesses in internal controls.
• The transition to a new accounting firm could impact the timing and accuracy of future financial reports.

Key Dates

Keywords

accounting firm, CBIZ, Marcum, auditor, Jerash Holdings, resignation, engagement, financial reporting, internal controls