In a recent SEC filing, Ideanomics, Inc., a company specializing in motor vehicles and passenger car bodies, disclosed a change in its certifying accountant and internal control weaknesses. On January 16, 2025, the New York-based firm received a resignation letter from its independent registered accounting firm, Grassi & Co. CPAs, P.C. ("Grassi").
The company, which has not yet issued consolidated financial statements for the fiscal year ended December 31, 2024, noted that Grassi had not audited such statements. For the prior year ended December 31, 2023, Grassi's audit report did not contain any adverse opinion or disclaimer of opinion. However, it included a caution about Ideanomics' ability to continue as a going concern due to recurring losses, accumulated deficit, and insufficient cash levels.
During the fiscal years 2023 and 2024, and subsequent interim periods up to the resignation date, there were no disagreements between Ideanomics and Grassi on accounting principles or practices, financial statement disclosure, or auditing scope or procedure that would have required Grassi to reference in its reports.
However, the filing revealed that Ideanomics identified material weaknesses in its internal control over financial reporting for the fiscal year ended December 31, 2023. These weaknesses included issues with the design and implementation of internal controls over valuation models, revenue recognition processes, and insufficient accounting and financial reporting personnel with expertise in U.S. GAAP and SEC requirements.
Additionally, the company recognized inadequacies in internal controls over non-routine transactions, risk assessment, data validation, entity-level reviews, precision in preventing or detecting material misstatements, and information technology general controls.
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