Item 4.01. Changes in Registrant's Certifying Accountant.
On February 16, 2022, the Audit Committee (the "Audit Committee") of the Board
of Directors of EACO Corporation (the "Company") approved the engagement of
Haskell & White LLP ("Haskell") to serve as the Company's independent registered
public accounting firm for the Company's fiscal year ended August 31, 2021,
effective as of February 17, 2022. Also on February 16, 2022, the Audit
Committee dismissed Baker Tilly US, LLP ("Baker Tilly") as the Company's
independent registered public accounting firm, effective as of February 17,
2022.
The report of Baker Tilly on the Company's consolidated financial statements as
of and for the fiscal year ended August 31, 2020 did not contain an adverse
opinion or a disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope or accounting principle. As previously disclosed by the
Company, the Company has not filed the Annual Report on Form 10-K for the fiscal
year ended August 31, 2021. Baker Tilly did not issue a report on the Company's
consolidated financial statements as of and for the fiscal year ended August 31,
2021.
During the two fiscal years ended August 31, 2021, and the subsequent interim
period through February 17, 2022, there were no disagreements as described under
Item 304(a)(1)(iv) of Regulation S-K with Baker Tilly on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to Baker Tilly's
satisfaction, would have caused Baker Tilly to make reference to the subject
matter thereof in connection with its reports on the financial statements of the
Company for such years. In addition, during the two fiscal years ended August
31, 2021 and the subsequent interim period through February 17, 2022, there were
no reportable events as described under Item 304(a)(1)(v) of Regulation S-K
except the following events. As disclosed in Part I, Item 4 of the Company's
Form 10-Q for the quarters ended November 30, 2020 and May 31, 2021, the
Company's management determined that the Company's internal controls over
financial reporting were not effective as of the end of each respective period
due to the following material weakness: the Company did not maintain effective
controls over the financial statement closing process, including manual journal
entries recorded in the preparation of the financial statements related to lease
accounts, and certain inventory and accrued liability accounts. The Company's
controls do not include multiple required levels of review and approval for
manual journal entries. This deficiency did not result in a material revision of
any of the Company's previously issued financial statements. However, if not
addressed, the deficiency could result in material misstatement in the future.
Accordingly, the management of the Company has determined that this control
deficiency constitutes a material weakness. Baker Tilly also advised management
of the need to significantly expand the scope of our audit to include additional
analysis and testing of key reports generated by the Company's IT system. Baker
Tilly had not completed its expanded procedures prior to its dismissal.
The Company has provided Baker Tilly with a copy of this Current Report on Form
8-K and requested that Baker Tilly furnish it with a letter addressed to the
Securities and Exchange Commission stating whether or not it agrees with the
above statements. A copy of Baker Tilly's letter, dated February 23, 2022, is
attached hereto as Exhibit 16.1.
During the two most recent fiscal years, and in the subsequent interim periods
through February 17, 2022, neither the Company nor anyone acting on its behalf
has consulted with Haskell regarding either (i) the application of accounting
principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Company's financial statements,
and either a written report was provided to the Company or oral advice was
provided that Haskell concluded was an important factor considered by the
Company in reaching a decision as to the accounting, auditing or financial
reporting issue; or (ii) any matter that was either the subject of disagreement
(as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions
to Item 304 of Regulation S-K) or a reportable event (as described in Item
304(a)(1)(v) of Regulation S-K).
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
16.1 Letter from Baker Tilly US, LLP to the Securities and Exchange Commission
dated February 23, 2022.
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