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NETCLASS TECHNOLOGY INC: Form 6-K Report on Auditor Changes and Internal Control Issues

$NTCL
Form 6-K
Filed on: 2024-12-30
Source
NETCLASS TECHNOLOGY INC: Form 6-K Report on Auditor Changes and Internal Control Issues

The document is a Form 6-K filing by NETCLASS TECHNOLOGY INC, detailing significant changes regarding their independent registered public accounting firm. Below are the key points extracted from the document:

  1. Dismissal of Previous Auditor:
  • NETCLASS TECHNOLOGY INC dismissed its independent registered auditor, Marcum Asia CPAs LLP, effective December 27, 2024.
  • This dismissal was approved and ratified by the Company’s Board of Directors on December 30, 2024.
  1. Auditor's Reports:
  • The reports from Marcum Asia for the fiscal years ending September 30, 2023, and 2022, did not contain any adverse opinions or disclaimers.
  • The reports were not qualified or modified regarding uncertainty, audit scope, or accounting principles.
  1. Disagreements & Reportable Events:
  • During the last fiscal year and through the date of dismissal, there were no disagreements with Marcum Asia regarding accounting principles or auditing scope.
  • However, there was a material weakness identified related to the Company's internal controls over financial reporting. The weaknesses included:
    • Lack of monitoring mechanisms and adequately designed management review controls.
    • Insufficient resources and expertise in U.S. GAAP within the accounting department.
    • Lack of controls in the IT environment, including security and change management.
  1. Appointment of New Auditor:
  • The Company appointed Wei, Wei & Co., LLP as its new independent registered public accounting firm, effective December 29, 2024.
  • The change in auditors was ratified by the Board of Directors and Audit Committee.
  1. Consultation with New Auditor:
  • Prior to the engagement of Wei, Wei & Co., LLP, the Company did not consult them regarding accounting principles or audit opinions on their financial statements.
  1. Request for Letter from Previous Auditor:
  • The Company provided Marcum Asia with a copy of the report and requested a letter stating whether they agree with the statements made in the filing.
  1. Contact Information:
  • The filing includes the principal office address of NETCLASS TECHNOLOGY INC located in Shanghai, People's Republic of China.

These changes indicate a significant transition in the Company's auditing processes and highlight existing challenges related to internal controls that may affect stakeholders' perception of the Company's financial reporting integrity.