Auditor Change
How much of a red flag is it that a company changes auditors? Any way to look into this change more and get more/less comfortable with it?
Dissecting the Markets's avatar
If they change auditors before an IPO, that's understandable because some accounting firms don't have the large staff that can handle IPOs. If they're consistently changing auditors (like Tether, for example), then that's a major red flag.
Young Money Capital's avatar
@dissectmarkets It's the first time they've changed auditors. Not a recent IPO.
Dissecting the Markets's avatar
@youngmoneycapital then it wouldn't be a big deal from my perspective. Sometimes, a firm would choose to work with another company because their auditing services are cheaper.
Devin LaSarre's avatar
Depends on history, management, overall complexity of legal and capital structures, etc.. Tbh, auditors can seem like a joke. All the largest frauds in the world were signed off on by their auditors.

This is one of those things that reminds us how important sizing is.
Conor Mac's avatar
Depends when, and the context, but for me its always something that raises suspicion.

Was studying a business recently and they changed auditor right after an IPO, read a few reports calling it a red flag, and assumed the same. Did more digging, and turns out the auditor itself had a policy where it resigns from each client after ten years as a an ethical thing. It was pre-planned before even the IPO.

So long as there is a rational explanation, then i can check it off.
Young Money Capital's avatar
@investmenttalk I'm trying to figure it out if it is rational. How did you find that out about your company?

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