8-K: Reliance Global Group Announces Change in Independent Auditor as Mazars USA LLP Ceases Operations

Reliance Global Group will be seeking a new independent auditor as Mazars USA LLP will cease operations following a transaction with FORVIS, LLP.

Summary

• Reliance Global Group has announced that Mazars USA LLP will no longer serve as their independent registered public accounting firm, effective after the filing of the 2023 annual report.
• Mazars is ceasing operations due to a transaction with FORVIS, LLP, and will no longer provide accounting and auditing services by June 2024.
• FORVIS, LLP will rebrand as Forvis Mazars, LLP effective June 1, 2024.
• Reliance Global Group is currently in discussions with several national audit firms to find a replacement.
• Mazars' audit reports for the fiscal years ending December 31, 2023 and 2022 did not contain any adverse opinions, disclaimers, or qualifications.
• There were no disagreements between Reliance Global Group and Mazars regarding accounting principles, financial statement disclosures, or auditing procedures during the fiscal years ended December 31, 2023 and 2022 and through April 4, 2024.
• No reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K, occurred during the specified periods.

Sentiment

Score: 6

Explanation: The announcement is neutral to slightly negative due to the change in auditors, but the lack of disagreements and the proactive approach to finding a new auditor mitigates the negative impact.

Positives

• Mazars' audit reports for 2022 and 2023 were clean, with no adverse opinions or qualifications.
• There were no disagreements between Reliance Global Group and Mazars on accounting or auditing matters.
• The company is actively seeking a new auditor, indicating a proactive approach to maintaining compliance.

Negatives

• Reliance Global Group needs to find a new independent auditor due to Mazars ceasing operations.
• The change in auditors could cause some disruption and additional costs for the company.

Risks

• The transition to a new auditor could pose challenges in terms of continuity and potential delays in financial reporting.
• There is a risk of increased costs associated with engaging a new audit firm.
• The company needs to ensure a smooth transition to avoid any potential issues with regulatory compliance.

Future Outlook

Reliance Global Group intends to engage a new independent registered public accounting firm in the near future.

Management Comments

• The Company is in discussions with several national audit firms and intends to engage a new independent registered public accounting firm in the near future.

Industry Context

The consolidation of accounting firms, as seen with the Mazars and FORVIS transaction, is a trend in the industry, which can lead to companies needing to change auditors.

Comparison to Industry Standards

• The change of auditors is not uncommon, especially when firms merge or restructure, as is the case with Mazars and FORVIS.
• Companies of similar size and complexity to Reliance Global Group often engage national audit firms, which Reliance is now pursuing.
• The lack of disagreements with the previous auditor is a positive sign, as it indicates a healthy relationship and no underlying accounting issues.

Stakeholder Impact

• Shareholders may be concerned about the change in auditors, but the company's proactive approach should reassure them.
• Employees may experience some disruption during the transition to a new auditor.
• Creditors and other stakeholders will likely monitor the situation to ensure the company maintains financial reporting integrity.

Next Steps

• Reliance Global Group will select and engage a new independent registered public accounting firm.
• The company will ensure a smooth transition of audit responsibilities to the new firm.

Key Dates

Keywords

auditor, Mazars, FORVIS, accounting, audit, financial statements, Reliance Global Group, independent registered public accounting firm