8-K: Scholar Rock Holding Corporation Announces Change in Independent Accountant

Ernst & Young LLP will not stand for re-election as Scholar Rock Holding Corporation's independent accounting firm, effective after the filing of the Form 10-Q for the quarter ending March 31, 2025.

Summary

• Scholar Rock Holding Corporation received notice from Ernst & Young LLP (EY) on May 6, 2025, that EY will decline to stand for re-election as the company's independent registered public accounting firm for the fiscal year ending December 31, 2025.
• EY will cease providing services after the filing of the Form 10-Q for the quarter ending March 31, 2025.
• EY's reports on the consolidated financial statements 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 between the Company and EY on any matter of accounting principles, practices, financial statement disclosure, or auditing scope or procedure during the fiscal years ended December 31, 2024 and 2023, and the interim period through May 6, 2025.
• There were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K during the same period.
• The Company has provided EY with a copy of the Form 8-K and requested a letter stating their agreement with the statements made, which EY provided on May 12, 2025.
• Scholar Rock has initiated discussions with other independent registered public accounting firms to engage a new independent accountant and will disclose the engagement as required by SEC rules.

Sentiment

Score: 6

Explanation: The announcement is neutral. It simply states a change in accounting firm, which is a routine business operation. The absence of disagreements with the previous firm is reassuring.

Positives

• EY's reports did not contain any adverse opinions, disclaimers, qualifications, or modifications.
• There were no disagreements between Scholar Rock and EY on accounting principles or auditing procedures.
• EY agrees with the statements made in the Form 8-K.

Negatives

• The company needs to find a new independent registered public accounting firm.

Risks

• The transition to a new accounting firm could present challenges.
• There is a risk of potential delays or increased costs associated with the change in auditors.

Future Outlook

The company will disclose the engagement of a new independent accountant as required by SEC rules.

Industry Context

Changes in auditors are not uncommon, but investors often scrutinize the reasons behind such changes, especially for biotech companies where financial stability and regulatory compliance are critical.

Comparison to Industry Standards

• The process of changing auditors is generally standardized across publicly traded companies, involving communication with the outgoing auditor and selection of a new firm.
• Companies like Amgen, Biogen, and Gilead Sciences also undergo periodic auditor reviews and changes as part of corporate governance best practices.
• The key is ensuring a smooth transition and maintaining transparency with investors regarding the reasons for the change.

Stakeholder Impact

• Shareholders will be informed of the new accounting firm.
• The change should not directly impact employees or customers.

Next Steps

• Scholar Rock will engage a new independent registered public accounting firm.
• The company will disclose the engagement of the new accountant as required by SEC rules.

Key Dates

Keywords

independent accountant, Ernst & Young, audit, accounting firm, Scholar Rock