Auditor transitions
SESGLO helps SEC reporting companies move to a new PCAOB-registered auditor in an orderly way, from audit committee approval and the Form 8-K Item 4.01 filing to predecessor communications and opening balances. Scope, fixed fee and timeline are agreed in writing before any fieldwork begins.
Changing auditors is a regulated event for an SEC reporting company. It is disclosed publicly, the former auditor comments on your disclosure in writing, and the new firm has to get up to speed before the next filing deadline. This service is for companies that need that handover done carefully:
If you are still comparing firms, our guide on how to find and verify a PCAOB-registered auditor explains how to check a firm's registration and inspection history.
For listed issuers, Exchange Act Rule 10A-3, which implements Sarbanes-Oxley Section 301, makes the audit committee directly responsible for appointing, compensating, retaining and overseeing the auditor. OTC-quoted companies are not subject to that listing requirement, but the same governance applies in practice: the audit committee (or the full board, if there is no committee) approves both the dismissal and the new engagement. We give the committee a written proposal, independence confirmations under SEC Rule 2-01 of Regulation S-X and PCAOB Rule 3520, and the communications required before acceptance.
Form 8-K Item 4.01 must be filed within four business days of the resignation, dismissal or engagement. The Form 8-K instructions treat the former auditor's departure and the new auditor's engagement as separate events, so two filings are common. The content comes from Item 304 of Regulation S-K:
We review the successor-related disclosures before you file. Your securities counsel remains responsible for the filing itself.
Item 304(a)(3) requires you to give the former auditor a copy of your disclosure no later than the filing date and to ask for a letter to the SEC saying whether it agrees. If the letter is not ready at filing, it must be filed within ten business days after the 8-K. Once received, it must be filed by amendment within two business days. Any interim letter is also filed by amendment within two business days.
Under PCAOB AS 2610, we ask for your written permission and then make the required inquiries of the predecessor before accepting the engagement. These cover management integrity, disagreements, communications about fraud, illegal acts and internal control, and the reasons for the change. We then arrange to review the predecessor's workpapers.
We obtain sufficient appropriate evidence about opening balances and the consistency of accounting principles. The predecessor's workpapers help, but the opinion is ours alone and does not rely on the predecessor's work.
The SEC staff's Financial Reporting Manual, Topic 4 says that reports from a firm whose PCAOB registration has been revoked can no longer be included in filings made on or after the revocation date, and that the affected periods generally need to be re-audited. Firms that have ceased operations, and restatements, raise similar issues. We scope any re-audit as a separate, fixed-fee workstream. If an inspection is part of the background, see PCAOB inspection remediation.
The current OTCQB Rules and OTCQX Rules for U.S. Companies require companies to update their OTC Markets company profile promptly after a change in auditors. We add this to the transition checklist.
This is an illustrative sequence for a calendar-year company changing auditors mid-year. Your actual dates will be confirmed in your written proposal.
Scoping call, independence checks and a written proposal with a fixed fee to the audit committee.
The committee approves the change, you file Item 4.01 within four business days, and you ask the former auditor for its Exhibit 16 letter.
AS 2610 inquiries, engagement letter and access to the predecessor's workpapers.
Risk assessment, opening-balance procedures and, where applicable, quarterly reviews.
Fieldwork, audit committee communications and report issuance for the Form 10-K.
Note: A change made within weeks of the Form 10-K deadline compresses every step. Form NT 10-K under Rule 12b-25 provides only a limited extension, so plan the change as early in the fiscal year as possible.
We quote a fixed fee in writing before fieldwork starts. The main factors are:
Read how we price engagements. We do not publish fee ranges: schedule a meeting so we can evaluate your company and present a formal proposal.
The signing partner handles the predecessor inquiries and audit committee discussions personally, from planning to issuance.
Scope, fee and a week-by-week timeline are set out in the proposal before fieldwork begins. We reply to proposal requests within one business day.
Our engagement teams work in English and Spanish, which helps companies with Latin American operations or records.
Asesoria Global, Sociedad Anónima, PCAOB Firm ID 7184, headquartered in Guatemala City and working remotely with U.S. issuers. See our quality control approach.
For a step-by-step walkthrough, read how to change auditors as a public company, or write to info@sesglo.com.
FAQ
For listed issuers, Exchange Act Section 10A(m) and Rule 10A-3 make the audit committee directly responsible for appointing, compensating and overseeing the auditor. Companies quoted only on OTC Markets are not subject to the listing requirement, but the decision still normally rests with the audit committee or, if there is none, the full board. Minutes should record the approval and its date.
Item 4.01 is due within four business days of the event. A resignation or dismissal is a separate reportable event from engaging the new firm, so a company may file two reports: one when the former auditor leaves and another when the successor is engaged. The second report does not need to repeat information already disclosed in the first.
Item 304(a)(3) requires the company to ask for the letter as promptly as possible so it can be filed within ten business days after the Form 8-K. Once received, it must be filed by amendment within two business days. The former auditor may also send an interim letter flagging concerns, which is likewise filed by amendment. Keep a written record of every request.
Yes. Item 304 asks whether there were disagreements on accounting principles or practices, financial statement disclosure, or auditing scope or procedure during the two most recent fiscal years and any later interim period. It also asks about reportable events, such as the auditor advising that the internal controls needed to produce reliable financial statements do not exist.
Not always. If the predecessor can reissue its report and consent to its use, the prior year normally stays as it is. A re-audit is generally needed when the predecessor's PCAOB registration has been revoked, when the firm has ceased operations and cannot reissue, or when restatement adjustments are significant enough that a full re-audit is required. Your securities counsel should confirm the approach.
It is possible but tight. The successor still has to complete acceptance procedures, predecessor inquiries, independence checks and a full audit. Rule 12b-25 gives a limited extension to companies that file Form NT 10-K on time and meet its conditions, but it is not a plan. The earlier the change is made in the fiscal year, the lower the risk.
The current OTCQB Rules and OTCQX Rules for U.S. Companies (April 2026 versions) require the company to update its OTC Markets company profile promptly when it changes its independent accountants. Both tiers also require audits by a PCAOB-registered firm, with limited exceptions such as certain international companies. Check the current rules for your tier.
Keep reading
Changing auditors is routine, but the SEC disclosure rules are precise and the timing interacts with your 10-K and 10-Q deadlines. Here is the sequence, the filings and the traps.
A registration number is the starting point, not the answer. This guide shows CFOs and audit committees how to use the PCAOB's own public databases and SEC EDGAR to check a prospective audit firm before signing an engagement letter.
There is no single price for a PCAOB audit. This guide explains what actually moves the fee, what a fixed-fee proposal should include, and how to benchmark what comparable companies pay using their own SEC filings.
