The first auditor appointed by former President Donald Trump's social media company resigned after just a brief tenure, prompting the firm to seek a replacement.
Trump Media's First Auditor Reportedly Leaves the Company
According to the Financial Times, Trump Media & Technology Group initially hired WithumSmith+Brown to audit its financial statements after the company's establishment in 2021.
However, sources told the Financial Times that by the end of the year, Withum had opted to sever ties with the business venture associated with the former president.
This departure led Trump Media to pursue the services of BF Borgers, a smaller accounting firm based in Denver, which was engaged for the company's first annual audit in January 2022 for a fee of $150,000.
Increased Scrutiny on Business Dealings of Donald Trump
Withum's resignation coincided with increased scrutiny of Donald Trump's business dealings, including investigations by New York's attorney general into the Trump Organization's financial practices, culminating in indictments and convictions for fraud.
Trump Media also faced its own challenges, with the Securities and Exchange Commission investigating trading in shares of a shell company in December 2021 as it prepared to go public.
Withum's resignation explained why Trump Media entered the stock market recently with a smaller audit company than would usually be hired by such a high-profile firm.
Every public firm must have its financial statements signed off by a regulated auditor who will check against errors or outright fraud. In contrast, auditors should have diligent client acceptance procedures to know if they are comfortable taking on a company.
According to the Financial Times, both Withum and BF Borgers declined to comment about their work at Trump Media. Earlier this month, the Financial Times reported that BF Borgers has one of the worst inspection records among the hundreds of audit firms overseen by the US Public Company Accounting Oversight Board.
A peer review system run by the American Institute of Certified Public Accountants found multiple instances of the firm failing to meet professional standards in its audit work.
The company has also been prohibited from taking on new clients in Canada after failing to meet professional standards in public company audits.
Join the Conversation