It was a sad morning as the United States of America Inc. lost 50 percent of their value. Their vending-machine payment provider’s auditor had made a resignation. The company had lost its important financial statements.
A letter was submitted to the USAT’s board of directors on February 1st. In that letter, RSM’s auditor from Chicago noted that they were not going to pay attention to the management representations anymore.
This statement came as a result of an audit that was conducted in 2017, which emphasized on financial reporting.
Additionally, the board stated that the financial statement for the financial year came to an end on the 30th day of June, the year 2017. The financial statement included press releases, quarterly reports and the other disclosures, which usually come to an end on the 30th day of September, 31st day of March, and the 31st day of December respectively.
Malvern is in the process of recruiting an independent auditor equipped with excellent customer financing qualities as fast as possible to replace the former auditor who resigned. This is according to a spokesperson who informed Digital Transactions News of Malvern’s plans.
USAT started experiencing accounting problems in September 2018 when their finance function failed to file the annual report of the financial year that ended on the 30th day of June 2018 on time. This prompted an internal investigation to investigate customer contracts as well as accounting practices. The investigation found out that there was a recognition of about $5.5 million too early than expected.
To respond to the disclosures, William Blair and Co. had to suspend their ratings on USAT for some time. Robert Napoli, an analyst, expressed his disappointment saying that the updates by the company were disappointing
Following the sudden and untimely resignation of USAT’s Chief Financial Officer, USAT has made a couple of changes within their executive. Even as USAT is still looking for the right replacement, a caretaker Chief Executive Officer has been appointed to do the job.
As late as Thursday, USAT had its shares trading at $3.40 – that’s on the NASDAQ Global Market. This was a negative deviation in comparison from Wednesday’s $6.88. This should worry USAT because it may give other companies a competitive advantage.
Over to You
It’s a concern that there is a looming crisis of accounting in the United States, especially for the USAT. As they look for a suitable replacement for an auditor, they should also look into better ways to solve the accounting problems within their company.
Author Bio: As the FAM account executive, Michael Hollis has funded millions by using customer financing solutions. His experience and extensive knowledge of the industry has made him finance expert at First American Merchant.