8-K: Kingstone Companies Changes Accounting Firms Following Acquisition

Kingstone Companies, Inc. announces the resignation of Marcum LLP as its independent auditor due to Marcum's acquisition by CBIZ CPAs P.C., and the subsequent engagement of CBIZ as the new auditor, effective April 8, 2025.

Summary

• Kingstone Companies, Inc. announced that Marcum LLP resigned as their independent registered public accounting firm on April 8, 2025, due to CBIZ CPAs P.C.'s acquisition of Marcum's attest business on November 1, 2024.
• The Audit Committee of Kingstone's Board of Directors appointed CBIZ as the new independent registered public accounting firm on the same day.
• Marcum's audit reports for the fiscal years ended December 31, 2024 and 2023, did not contain any adverse opinions, disclaimers, qualifications, or modifications regarding uncertainty, audit scope, or accounting principles.
• There were no disagreements or reportable events between Kingstone and Marcum during the fiscal years ended December 31, 2024 and 2023, and the subsequent period through April 8, 2025, as defined in Regulation S-K.
• Kingstone provided Marcum with disclosures and requested a letter to the SEC confirming Marcum's agreement with the statements, which was furnished on April 8, 2025.
• Kingstone did not consult with CBIZ regarding accounting principles or audit opinions during the fiscal years ended December 31, 2024 and 2023, and the subsequent period through April 8, 2025.

Sentiment

Score: 7

Explanation: The announcement is neutral to slightly positive. The auditor change is a procedural matter following an acquisition, and there are no indications of any underlying issues with the company's financials or accounting practices.

Positives

• The transition to a new auditor appears orderly, with no reported disagreements or issues with the previous auditor.
• Marcum's audit reports for the past two fiscal years were unqualified, suggesting sound financial reporting practices.

Industry Context

Auditor changes are common, especially following mergers and acquisitions within the accounting industry. This change reflects the consolidation trend in the accounting sector.

Comparison to Industry Standards

• The process of changing auditors is generally governed by SEC regulations, including requirements for disclosures about disagreements or reportable events.
• Companies like Accenture and Tata Consultancy Services also use large accounting firms and are subject to similar regulations regarding auditor independence and reporting.

Stakeholder Impact

• Shareholders may want to monitor the transition to the new auditor to ensure continued financial reporting quality.
• The change should have minimal impact on employees, customers, suppliers, and creditors.

Key Dates

Keywords

independent registered public accounting firm, CBIZ CPAs P.C., Marcum LLP, auditor, accounting, Kingstone Companies, audit committee