8-K: Marquie Group Appoints New Independent Accountant Following Acquisition of Previous Firm

The Marquie Group has replaced its independent accountant, Gries & Associates, with GreenGrowth CPAs following Gries' acquisition by GreenGrowth.

Summary

• The Marquie Group, Inc. has changed its independent accountant from Gries & Associates, LLC to GreenGrowth CPAs.
• This change occurred because Gries & Associates was acquired by GreenGrowth CPAs.
• The engagement agreement with GreenGrowth CPAs was executed on November 16, 2023.
• Gries' audit reports for the fiscal years ended May 31, 2023 and 2022 did not contain any adverse opinions, disclaimers, or qualifications, except for a statement about the company's ability to continue as a going concern.
• There were no disagreements between The Marquie Group and Gries regarding accounting principles, financial statement disclosures, or auditing scope.
• The company did discuss with Gries the continued existence of material weaknesses in the company's internal control over financial reporting.
• Gries confirmed they had no basis to agree or disagree with the company's statements in the filing.

Sentiment

Score: 6

Explanation: The change in auditor is a neutral event, but the going concern note and material weaknesses in internal controls are concerning. The lack of disagreements with the previous auditor is a positive.

Positives

• The transition to a new auditor appears to be smooth with no reported disagreements on accounting or auditing matters.
• The previous auditor's reports did not contain any adverse opinions or disclaimers, indicating a clean audit opinion, aside from the going concern note.

Negatives

• The previous auditor's reports included a statement about substantial doubt about the company's ability to continue as a going concern.
• The company discussed material weaknesses in internal control over financial reporting with the previous auditor.

Risks

• The going concern note in the previous auditor's reports indicates potential financial instability.
• The existence of material weaknesses in internal control over financial reporting could lead to future financial reporting issues.

Management Comments

• The board of directors of the Company, acting as the audit committee, approved the decision to change independent accountants.

Industry Context

Changes in auditors are not uncommon, especially when an accounting firm is acquired. This change is a result of a business transaction rather than a performance issue with the previous auditor.

Comparison to Industry Standards

• The process of changing auditors due to acquisition is standard practice in the industry.
• The lack of disagreements with the previous auditor is a positive sign, indicating a smooth transition.
• The going concern note is not uncommon for smaller companies and is a standard disclosure.

Stakeholder Impact

• Shareholders should be aware of the change in auditor and the going concern note.
• The company's management will need to address the material weaknesses in internal control over financial reporting.

Key Dates

Keywords

independent accountant, auditor, Gries & Associates, GreenGrowth CPAs, audit, financial statements, internal control, going concern