8-K: Peregrine Industries Dismisses BF Borgers, Engages Barton CPA Following SEC Ban

Peregrine Industries has dismissed its auditor, BF Borgers, due to a permanent SEC ban and has engaged Barton CPA as its new independent auditor.

Summary

• Peregrine Industries dismissed BF Borgers as their independent auditor on May 8, 2024, after the SEC issued a permanent ban against BF Borgers.
• The SEC ban resulted from BF Borgers failing to conduct audits in accordance with PCAOB standards.
• The company's previous audits by BF Borgers for fiscal years 2022 and 2023 did not contain adverse opinions, disclaimers, or qualifications, except for a going concern explanatory paragraph.
• Peregrine Industries had not yet received an audit report from BF Borgers for the fiscal year ending July 31, 2024.
• There were no disagreements with BF Borgers on accounting principles, financial disclosures, or auditing procedures.
• The company engaged Barton CPA as their new independent auditor on May 20, 2024.
• Peregrine Industries did not consult with Barton CPA on accounting principles or audit opinions prior to the engagement.

Sentiment

Score: 3

Explanation: The document indicates a significant negative event with the dismissal of the auditor due to an SEC ban, which raises concerns about past financial statements and future compliance. The going concern note also adds to the negative sentiment.

Positives

• The company acted swiftly to replace their auditor after the SEC ban.
• The previous audits by BF Borgers did not have any major issues other than a going concern note.
• The company has engaged a new auditor, Barton CPA, to ensure continued compliance.

Negatives

• The dismissal of BF Borgers was due to a serious regulatory issue, indicating potential past audit concerns.
• The company had not yet received an audit report from BF Borgers for the fiscal year ending July 31, 2024, which may cause delays.

Risks

• The SEC ban on BF Borgers could raise concerns about the reliability of past financial statements.
• The change in auditors may lead to delays in the completion of the fiscal year 2024 audit.
• The company's going concern note in previous audits indicates potential financial instability.

Future Outlook

The company will provide an updated disclosure once a new public accounting firm is engaged.

Management Comments

• The Board of Directors approved the dismissal of BF Borgers.
• The Board of Directors is in the process of engaging a new public accounting firm.
• The Board of Directors approved the engagement with BARTON CPA PLLC on May 20, 2024.

Industry Context

The dismissal of an auditor due to regulatory issues is a significant event that can impact investor confidence and is closely monitored by the SEC. This situation highlights the importance of auditor independence and compliance with accounting standards.

Comparison to Industry Standards

• The dismissal of an auditor due to an SEC ban is not a common occurrence and is a serious issue.
• Companies typically change auditors due to disagreements or strategic reasons, not due to regulatory action against the auditor.
• The engagement of a new auditor is a standard process, but the circumstances surrounding this change are unusual.
• The going concern note in previous audits is not uncommon for smaller companies, but it does indicate a higher level of financial risk.

Stakeholder Impact

• Shareholders may be concerned about the reliability of past financial statements and the potential for delays in future filings.
• Employees may be concerned about the financial stability of the company.
• Creditors may be more cautious about extending credit to the company.

Next Steps

• The company will provide an updated disclosure once a new public accounting firm is engaged.
• The company will need to complete the audit for the fiscal year ending July 31, 2024 with the new auditor.

Key Dates

Keywords

auditor, BF Borgers, Barton CPA, SEC, PCAOB, audit, financial statements, accounting, going concern