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MEDIROM Healthcare Technologies Inc. Financial Report: Audit Changes & Concerns Revealed

$MRM
Form 6-K
Filed on: 2024-12-27
Source
MEDIROM Healthcare Technologies Inc. Financial Report: Audit Changes & Concerns Revealed

The key information extracted from the financial report (Form 6-K) for MEDIROM Healthcare Technologies Inc. is as follows:

Company Overview

  • Name: MEDIROM Healthcare Technologies Inc.
  • Address: 2-3-1 Daiba, Minato-ku, Tokyo 135-0091, Japan
  • Commission File Number: 001-39809

Changes in Certifying Accountant

  • Dismissal of Independent Accountant:
  • On December 24, 2024, MEDIROM terminated the services of TAAD LLP as its independent registered public accounting firm, effective immediately. This action was approved by the Board of Directors.
  • No Disagreements or Reportable Events:
  • There were no disagreements between the Company and TAAD LLP on accounting principles or practices during the fiscal years ended December 31, 2022, and December 31, 2023, nor in the interim period up to December 24, 2024.
  • Material Weaknesses Identified:
  • During the audit for the year ended December 31, 2023, TAAD LLP identified several material weaknesses in the Company’s internal controls, specifically:
    1. Inadequate review processes for journal entries.
    2. Insufficient management review controls over key financial information.
    3. Internal controls not being updated timely due to rapid changes in operations.
  • Going Concern:
  • TAAD LLP's audit reports for the years ending December 31, 2022, and 2023 raised substantial doubt about the Company's ability to continue as a going concern, although they did not include an adverse opinion or disclaimer.

New Independent Accountant

  • Appointment of New Firm:
  • GuzmanGray was appointed as the new independent registered public accounting firm, effective December 25, 2024. The appointment was also approved by the Board on December 24, 2024.
  • No Prior Consultation:
  • The Company has not consulted with GuzmanGray regarding any matters related to accounting principles or disagreements.

Steps Taken by the Company

  • The Company has acknowledged the identified material weaknesses and has taken steps towards remediation. They have also communicated with TAAD LLP regarding these issues.

Signatory

  • The report was signed by Fumitoshi Fujiwara, Chief Financial Officer, on December 27, 2024.

Summary

This report indicates significant changes in the Company’s auditing process, including the dismissal of its previous accounting firm due to identified weaknesses in internal controls and the appointment of a new firm to oversee future audits. The emphasis on the material weaknesses and going concern issues suggests areas of risk that stakeholders should monitor closely.