USA Technologies’ shares lost roughly 45 percent of their value on Thursday in intraday trading after an SEC filing by the firm revealed that RSM US LLP, the firm’s auditor, resigned over concerns tied to financial reporting by the company.
The letter detailing the resignation was dated Feb. 1, and the filing with the SEC came this week. RSM has said, per USA Technologies’ document, that it could “no longer” rely on USA Technologies’ representations tied to a 2017 audit of internal controls. At least some of the company’s previous financial statements are unreliable, said RSM.
In the meantime, USA Technologies said in the same filing that it will seek to have a new independent auditor in place as soon as “practicable.”
The letter was addressed to the USA Technologies audit committee. The statements that have been presented for the periods during the fiscal year that ended in June of 2017 were singled out, as the auditor said that the quarters ended in March, September and December of that year have proved unreliable.
As has been reported, the company missed its filing deadline for the year that ended in June 2018 (that deadline was in September, according to reports). At least several million dollars of revenues had been tied to early recognition — which as a practice can lead to inflated top lines. The company has said that such amounts should not exceed $5.5 million.
The SEC filing also notes that RSM had not completed its audit for the fiscal year that ended June 30, 2018.