B. Riley Financial Inc.

09/12/2025 | Press release | Distributed by Public on 09/12/2025 15:16

Change in Certifying Accountants (Form 8-K)

Item 4.01 Change in Registrant's Certifying Accountant.

(a) Dismissal of Previous Independent Registered Public Accounting Firm

On September 8, 2025, the Audit Committee of the Board of Directors (the "Committee") of B. Riley Financial, Inc. (the "Company") dismissed Marcum LLP ("Marcum"), the Company's prior independent registered public accounting firm, effective upon the completion of its audit and the issuance of its report on the Company's consolidated financial statements and internal control over financial reporting for the Company's fiscal year ended December 31, 2024, which will be included in the Company's Annual Report on Form 10-K for that year.

Marcum's audit report on the Company's consolidated financial statements for the Company's fiscal year ended December 31, 2023 and 2022 did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended December 31, 2024 and December 31, 2023, and the subsequent interim period through September 8, 2025, there were (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K between the Company and Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Marcum's satisfaction, would have caused Marcum to make reference to the subject matter of the disagreements in connection with its reports on the Company's consolidated financial statements for such years, and (ii) no "reportable events" within the meaning of Item 304(a)(1)(v) of Regulation S-K, except for the following material weaknesses in the Company's internal control over financial reporting:

● The Company identified a separate material weakness relating to information technology general controls ("ITGCs") issues in one of the B. Riley Advisory Holdings, LLC subsidiaries primarily related to ineffective controls over user access management over a certain business application. As a result, business process automated and manual controls that were dependent on the affected ITGCs could have been adversely impacted.
● The Company was unable to rely on a System and Organization Controls ("SOC") 1 Type 2 report associated with the utilization of a third-party service organization's hosted information technology ("IT") solution for the processing of customer sales and billing information in the Company's Marconi Wireless subsidiary. As a result, the internal control processes performed by the third-party service organization were not designed or implemented to operate at a sufficient level of precision. As such, the Company could not rely on the information produced by the system. Business process automated and manual controls that were dependent on these controls could have been adversely impacted.
● The Company identified two material weaknesses in controls related to ITGCs at the Company's Lingo Management, LLC and Tiger US Holdings, Inc. subsidiaries in the areas of user access, program change management, and IT operations over IT systems and the reports generated from these systems used in the execution of controls that support the Company's financial reporting processes. As a result, business-process automated and manual controls that were dependent on the affected ITGCs could have been adversely impacted.
● The Company identified a material weakness relating to the operating effectiveness of management's review controls over level 3 investment valuations such that management's review procedures were not operating at a level of precision sufficient to prevent or detect a potential material misstatement in the consolidated statements. Specifically, management's review procedures were not operating at a level of precision sufficient to prevent or detect a potential material misstatement in the consolidated financial statements.
● The Company identified a material weakness relating to the operating effectiveness of management's precision of their review controls to identify and disclose material related party transactions in accordance with Accounting Standards Codification 850, Related Party Disclosures.
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