SPAR Group, Inc. Announces Change of Independent Auditor for Fiscal Year 2026
Key Highlights:
- SPAR Group, Inc. (Nasdaq: SGRP) has dismissed BDO USA, P.C. as its independent registered public accounting firm, effective April 7, 2026.
- The Audit Committee and Board have appointed Grant Thornton LLP as the new independent auditor for the fiscal year ending December 31, 2026.
- The Company states there were no disagreements with BDO regarding accounting principles, practices, or financial disclosures, except for previously disclosed material weaknesses in internal controls.
- This change follows internal discussions and analysis among the Audit Committee, Board, and management.
- A letter from BDO confirming agreement with SPAR Group’s statements regarding the dismissal has been filed as Exhibit 16.1.
Details of the Auditor Change
On April 6, 2026, SPAR Group’s Audit Committee and Board approved the dismissal of BDO USA, P.C. as the Company’s independent registered public accounting firm. The Company formally notified BDO on April 7, 2026. This follows a comprehensive review and analysis by the Company’s Audit Committee, Board, and management team.
The Company’s audit reports for the past two years prepared by BDO were not modified regarding uncertainty, audit scope, or accounting principles. Importantly, there were no disagreements between SPAR Group and BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure (as defined under Item 304(a)(1)(iv) of Regulation S-K), which would have required disclosure if not resolved.
However, SPAR Group did previously disclose material weaknesses in its internal control over financial reporting as of December 31, 2024. These weaknesses related to:
- Inadequate controls over the financial statement close process, specifically in the preparation and review of balance sheet account reconciliations and segment disclosures. This led to errors in revenue, expense, accrual accounts, and prepaid accounts at year-end.
- Ineffective controls over non-recurring transactions, including issues with accounting for the deconsolidation and sale of international components. This resulted in errors in the calculation and presentation of such transactions.
These matters were discussed with BDO, and SPAR Group has authorized BDO to provide full responses to inquiries from Grant Thornton.
Appointment of Grant Thornton LLP
On April 6, 2026, the Audit Committee and Board also approved the engagement of Grant Thornton LLP as the Company’s new independent registered public accounting firm for the fiscal year ending December 31, 2026. SPAR Group confirms that, during fiscal years 2024 and 2025 and the interim period prior to this engagement, the Company did not consult with Grant Thornton regarding any accounting principles, the type of audit opinion that might be rendered, or any disagreements or reportable events as defined under SEC rules.
Potential Shareholder Impact and Price Sensitivity
This change in auditor is a significant event for shareholders and the market:
- Changes in a company’s independent auditor can often be perceived by investors as a signal of underlying issues or a shift in corporate governance practices, potentially influencing share price volatility in the near term.
- The disclosure of material weaknesses in internal controls, even if previously reported, may remain a concern for investors regarding the reliability of financial statements and management’s ability to address these issues.
- The appointment of Grant Thornton, a well-respected audit firm, could be seen positively if it leads to enhanced financial oversight and resolution of the reported control weaknesses.
Additionally, SPAR Group has filed a letter from BDO with the SEC, confirming BDO’s agreement with the Company’s statements regarding the auditor change. This transparency may help mitigate any market concerns about the circumstances of the dismissal.
Forward-Looking Statements
SPAR Group cautions investors that this report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, including costs and effects associated with changing auditors, compliance with Nasdaq listing requirements, and the Company’s ability to resolve internal control weaknesses and maintain or improve operational performance. Investors are advised not to place undue reliance on these statements.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Readers should review all SEC filings and consult their financial advisors before making investment decisions regarding SPAR Group, Inc.
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