On August 17, 2015 Can-Cal Resources Ltd. was notified by L. L. Bradford & Company, LLC that the firm resigned as the independent registered public accounting firm. On August 17, 2015, the company engaged Thayer O'Neal Company PLLC as its independent registered public accounting firm for the company's fiscal year ended December 31, 2014. The decision to engage Thayer O'Neal as the company's independent registered public accounting firm was approved by the company's board of directors.
8-K 1 cancal_8k.htm FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 18, 2015
Can-Cal Resources Ltd. (Exact name of registrant as specified in its charter)
Nevada 0-26669 86-0865852 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.)
127 Estelle Avenue, Toronto, Ontario M2N 5H6 (Address of Principal Executive Officers) (Zip Code)
Registrant's telephone number, including area code: (702) 243-1849
N/A (Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.01 CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT.
Previous independent registered public accounting firm
On August 17, 2015 CAN-CAL RESOURCES LTD. (the “Registrant” or the “Company”) was notified by L. L. Bradford & Company, LLC (“L. L. Bradford”) that the firm resigned as the Registrant’s independent registered public accounting firm.
During the period preceding this resignation, the company has not had any "disagreements" (as such term is defined in Item 304 of Regulation S-K) with L. L. Bradford & Company, LLC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.
During the period since L. L. Bradford & Company, LLC was appointed as independent registered public accounting firm of the company through August 17, 2015, there were no -reportable events" (as such term is defined in Item 304 of Regulation S-K).
The Company provided L. L. Bradford with a copy of this disclosure set forth under this Item 4.01 and was requested to furnish a letter addressed to the Securities & Exchange Commission stating whether or not it agrees with the above statements.
A copy of the letter from L. L. Bradford is attached hereto as Exhibit 16.1
New independent registered public accounting firm
On August 17, 2015 (the "Engagement Date"), the Company engaged Thayer O'Neal Company PLLC ("Thayer O'Neal ") as its independent registered public accounting firm for the Company's fiscal year ended December 31, 2014. The decision to engage Thayer O'Neal as the Company's independent registered public accounting firm was approved by the Company's Board of Directors.
During the two most recent fiscal years and through the Engagement Date, the Company has not consulted with Thayer O'Neal regarding either:
1. the application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report was provided to the Company nor oral advice was provided that Thayer O'Neal concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or
2. any matter that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph (a)(l)(v) of Item 304 of Regulation S-K).
Item 9.01 Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
(c) Shell company transactions.
Not applicable
(d) Exhibit
Exhibit No. Description of Exhibit 16.1 Letter from L.L. Bradford & Company, LLC
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAN-CAL RESOURCES LTD.
Dated: August 18, 2015 By: /s/ Michael Hogan Name: Michael Hogan Title: President and Chief Executive Officer
PCAOB Sanctions 5 Auditors for Violations By Michael Cohn Published April 07 2015, 1:59pm EDT
The Public Company Accounting Oversight Board has sanctioned five current and former partners and employees of the auditing firms L.L. Bradford & Company, LLC in Las Vegas and Samyn & Martin in Kansas City, Mo., for violating PCAOB requirements for auditor independence, audit partner rotation, and audit planning and performance.
"These orders reinforce the principle that independence is the bedrock of auditor objectivity," said Claudius B. Modesti, director of PCAOB Enforcement and Investigations, in a statement last week. "Investors rely on auditors being independent of their public audit clients in both fact and appearance."
In one order, the PCAOB found that Dustin M. Lewis and Eric S. Bullinger, while partners at L.L. Bradford & Company, violated audit partner rotation requirements with respect to the audits and reviews of six public companies. The board also found that, in violation of PCAOB standards that require a two-year "cooling off" period, Bullinger served as the engagement quality reviewer immediately after serving as engagement partner for the audits of two public companies. The Board further found that, on another audit, Lewis failed to perform his engagement quality review in accordance with PCAOB standards.
The PCAOB censured Lewis, barred him from associating with a PCAOB-registered public accounting firm, with the right to petition to remove the bar after two years, and imposed a $10,000 civil money penalty against him. The Board censured Bullinger and barred him from associating with a PCAOB-registered public accounting firm, with the right to petition to remove the bar after one year.
In a second order, the PCAOB found that Suzanne M. Herring violated independence requirements by providing bookkeeping services, financial statement preparation services, and valuation services to two public company audit clients for which she also served on the audit engagement teams at Samyn & Martin. In addition, the board found that Herring, while at L.L. Bradford & Company, directly and substantially contributed to the violation of independence requirements concerning the provision of prohibited non-audit services with respect to a public company audit client.
The PCAOB censured Herring, barred her from associating with a PCAOB-registered public accounting firm, with the right to petition to remove the bar after two years, and imposed a $5,000 civil money penalty against her.
In a third order, the PCAOB found that Hazel-Leilani De Los Reyes Bradford, while a partner at L.L. Bradford & Company, directly and substantially contributed to violations of PCAOB quality control standards related to providing sufficient assurance of compliance with independence requirements. The board found that Ms. Bradford assumed the role of quality control partner at the firm despite a lack of public company audit experience and an inadequate knowledge of PCAOB standards and relevant SEC rules and regulations.
The board censured Bradford, barred her from associating with a PCAOB-registered public accounting firm, with the right to petition to remove the bar after two years, and imposed a $25,000 civil money penalty against her.
White Paper Critical components to achieving the perfect order 3 keys to achieving the perfect order PARTNER INSIGHTS SPONSOR CONTENT FROM: NetSuite Accounting April 4 In a fourth order, the PCAOB found that Gordon Brad Beckstead, in his role as engagement partner on an L.L. Bradford & Company audit of a public company, violated PCAOB standards in multiple respects. Among other things, he failed to properly plan the audit, appropriately assess risks, evaluate the qualifications and competence of a specialist, perform sufficient audit procedures to assess the reasonableness of assumptions used by the specialist, and appropriately test the company's reported revenue.
The board suspended Beckstead from associating with a PCAOB-registered public accounting firm for one year, and limited the activities that he may perform in connection with public company audits for one additional year. The PCAOB also censured Beckstead and required him to complete professional education courses related to public company audits.
The PCAOB noted that the respondents each consented to the orders without admitting or denying the board's findings. The findings were made pursuant to respondents' offers of settlement and are not binding on any other persons or entities in these proceedings or in any other proceeding. The PCAOB investigation was conducted by PCAOB Enforcement staff members Jennifer Gibbons, Michael Steele and Bryant Coleman.
Voices Auditors’ and accountants’ guide to SEC whistleblower awards By Jason Zuckerman Matthew Stock Published April 14 2017, 10:33am EDT
The SEC Whistleblower Program has awarded more than $150 million to 42 whistleblowers. Under the program, the SEC issues awards to individuals who provide original information that leads to enforcement actions resulting in monetary sanctions of more than $1 million. Whistleblowers’ awards range from 10 percent to 30 percent of the resulting monetary sanctions. The program allows whistleblowers to report anonymously if represented by counsel.
Many auditors (internal and external) and accountants may incorrectly assume they are not eligible for awards under the program. In certain circumstances, however, the SEC allows these employees to report violations and become eligible for awards. In doing so, the SEC recognizes that auditors and accountants often are in the best position to recognize and expose fraud.
Tip #1: Determine Eligibility
SEC building with official seal Image: Bloomberg The first step in any successful whistleblower claim for auditors and accountants is to determine eligibility. This requirement can be very complex for these professionals as the SEC Whistleblower Program has a general rule that individuals who are integral to a company’s compliance are not eligible for awards unless an exception applies. These individuals include employees whose principal duties involve compliance or internal-audit responsibilities, employees of public accounting firms, and even the officers, directors, trustees or partners of the relevant entity.
The exceptions to this rule, found in Section 21F-4 of the Securities Exchange Act, allow certain auditors and accountant to report to the SEC and receive awards under the program if:
(A) They reasonably believe the disclosure is necessary to prevent conduct that is likely to cause “substantial injury” to the financial interest or property of the entity or investors;
(B) They reasonably believe the entity is engaging in “conduct that will impede an investigation of the misconduct”; or
(C) At least 120 days have passed either since they properly disclosed the information internally, or since they obtained the information under circumstances indicating that the entity’s officers already knew of the information.
Notably, the 120-day exception in (C) does not apply to external auditors who obtained the information during the audit of an issuer. Instead, external auditors can immediately report to the SEC after they inform a superior in their accounting firm about improper or illegal client activity and the accounting firm fails to promptly report the securities law violation to the SEC. The first two exceptions also apply to external auditors when the violation is “material.”
So, what exactly do these exceptions mean…?
(A) Information Necessary to Prevent “Substantial Injury” to Financial Interest
In April, 2015, the SEC issued an award of more than $1 million to a compliance professional who “had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.” The SEC has not, however, provided detailed guidance on what type of conduct is “likely” to cause “substantial financial harm.” This ambiguity may work in whistleblowers’ favor, as the SEC has used its discretion to issue awards liberally.
In a recent enforcement action, the SEC awarded more than $5.5 million to a whistleblower who failed to meet the requirements for an award. Specifically, the whistleblower did not provide his or her disclosures “in writing,” as the Whistleblower Program requires. The SEC cited “highly unusual circumstances” in deciding to waive the “in writing” requirement for the whistleblower, who had provided information in a manner “expressly requested” by SEC enforcement staff.
(B) Information About “Conduct that Will Impede an Investigation of the Misconduct”
Auditors and accountants can also report to the SEC if their information reveals conduct by the entity that will impede an investigation of the misconduct. While the SEC has not yet issued an award under this exception, the rule appears to be straightforward: if one has evidence of tampering with an internal investigation, then he or she is permitted to report to the SEC immediately. This improper conduct may include destroying documents, influencing witness or concealing material information.
(C) 120-Day Exception
The final, and most concrete, exception applies where at least 120 days have passed since the auditor (excluding external auditors who obtained the information during the audit of an issuer) or accountant reported the information to their supervisor or to another person in the organization who is responsible for remedying the violation (i.e., the audit committee, chief legal officer, chief compliance officer, or their equivalents). Alternatively, the individual may report the information at least 120 days after receiving the information, if it was received under circumstances indicating that any of the aforementioned parties was already aware of it.
Importantly, any whistleblower who chooses this route should document the date of his or her disclosure in, for example, an email. Prior to receiving an award, all whistleblowers must prove their eligibility. Documentation that proves they waited 120 days may be the difference between a multimillion-dollar award or nothing.
Accordingly, eligibility depends on various factors. If you are uncertain about your eligibility, you should consult with an experienced SEC whistleblower attorney. A skillful analysis may be the difference between a multimillion-dollar whistleblower award and no award at all.
Tip #2: Establish a Material Violation
The second step for auditors and accountants is to determine whether they can establish a material violation of federal securities law. Auditors may be surprised they are not the only profession that constantly refers to the “materiality” of issues. In order words, can you show the SEC that your tip concerns a violation that is serious enough to warrant the use of its limited resources?
Whistleblowers have filed more than 18,000 tips with the SEC in the past five years. In a perfect world, the SEC would be able to investigate all legitimate tips and stop even immaterial violations. However, the SEC has limited resources, so it can pursue only the best tips (see Tip #5 on how to get the SEC’s attention with your tip).
If you have a hunch about a violation but lack any proof, then it may be worth investigating further, rather than submitting an incomplete or speculative claim to the SEC. Tips generally fall to the wayside unless they provide “specific” and “credible” information about material violations. That said, most whistleblowers should submit their tips as soon as possible (see Tip #3).
Tip #3: Act Fast
It is never too early to think about maximizing your potential award. Auditors and accountants may receive anywhere from 10 to 30 percent of the monetary sanctions collected in actions brought by the SEC and in related actions brought by other regulatory or law-enforcement authorities. And the timing of a whistleblower’s tip is a significant factor considered by the SEC in determining whether, and how much, to award.
To be eligible for an award, a whistleblower must first submit “original information.” Original information is any information the SEC does not already have. Whistleblowers who wait to report information, therefore, risk that someone else will submit the same information to the SEC first. Keep in mind that even if the SEC has already opened an investigation, whistleblowers may still qualify for an award if their information “significantly contributes” to the success of an enforcement action.
Next, the whistleblower office may reduce the amount of an award if the whistleblower unreasonably delays reporting the violation to the SEC. About 20 percent of the awards issued through 2015 were reduced because of an unreasonable reporting delay. In making this determination, the whistleblower office considers whether:
• The whistleblower failed to take reasonable steps to report the violation or prevent it from occurring or continuing;
• The whistleblower was aware of the violation but reported to the SEC only after learning of an investigation into the misconduct; and
• There was a legitimate reason for the whistleblower to delay reporting the violation.
For example, on Feb. 28, 2017, the SEC reduced a whistleblower’s award percentage to 20 percent due to the whistleblower’s delayed reporting and connections to the violation. According to the SEC’s order, “the Claims Review Staff reduced the award below from what it might otherwise have been because of both the Claimant’s culpability in connection with the securities law violations at issue in the Covered Action and the Claimant’s unreasonable delay in reporting the wrongdoing to the Commission. The Claimant did not submit a response challenging the Preliminary Determination.”
Finally, to be eligible for an award, some whistleblowers must take certain actions (e.g., the 120-day exception for auditors in certain circumstances, see Tip #1) before reporting to the SEC. Whistleblowers should therefore understand and consider the specific eligibility requirements in determining when to report to the SEC.
Tip #4: Know the Rules before Filing with the SEC
Besides avoiding “unreasonable delay,” auditors and accountants should be aware of other actions that influence the size of awards. Whistleblowers must learn the rules early on because some actions must be taken prior to filing with the SEC. For example, the whistleblower office may reduce the amount of an award if the whistleblower:
• Participated in, or was culpable for, the reported securities-law violation; or
• Interfered with the company’s internal compliance and reporting systems.
On the other hand, the whistleblower office may increase the amount of an award based on:
• The tip’s significance to the success of any proceeding brought against wrongdoers;
• The assistance that you and your legal representative provide in the SEC action or related action;
• The SEC’s law-enforcement interest in deterring the specific violation; and
• Whether, and the extent to which, you participated in your company’s internal compliance and reporting systems.
Accordingly, auditors and accountants have an incentive to report internally to their companies’ compliance personnel before going to the SEC. If whistleblowers choose to report internally (excluding external auditors who obtained the information during the audit of an issuer, see Tip #1) then they should also report the same information to the SEC within 120 days. That way, in evaluating a potential award, the SEC will consider the date of the internal report, rather than the date that the whistleblower reported to the SEC. As the SEC puts it, the whistleblower office will “hold your place in line.” This may determine, for example, whether a whistleblower submitted “original information.”
Tip #5: Draft a Tip that Grabs the SEC’s Attention
The SEC Whistleblower Office is relatively small, and thousands of tips are submitted annually. Whistleblowers and their attorneys should tailor their tips to quickly grab the SEC’s attention. While we could write a book on this section alone, here are a several “rules” to keep in mind when drafting your SEC Form TCR:
1. Provide the SEC with a clear roadmap for a successful enforcement action. Do not submit a pile of documents and expect the whistleblower office to figure it out. Instead, walk the SEC step by step through specific and credible examples of the violation(s).
2. Demonstrate how the violation is “material.” The SEC investigates only those violations that are serious enough to warrant the use of its limited resources. While demonstrating materiality, be sure to analyze the legal issues and tie them to the specific violations. This should include a discussion of potential challenges that the SEC may encounter and how the agency should address them.
3. If possible, provide the whistleblower office with documentation of the violation. The SEC is much more likely to act on a tip supported by strong evidence. A recent decision in Erhart v. Bofi Holdings clarifies that whistleblowers (even whistleblower who signed confidentiality agreements with their employers) are permitted to take “appropriate” company documents that are “reasonably necessary” to disclose fraud to the government. The judge warned, however, that wholesale stripping of confidential documents that is “vast and indiscriminate” may not immunize the whistleblower from potential liability.
4. Exclude certain types of evidence. For example, the SEC does not want information that may violate the company’s attorney-client privilege (e.g., documents, including emails, that involve advice from inside or outside counsel). If you have completed your due diligence and consulted with an attorney, and you still have questionable evidence, then you may want to notify the SEC so that its taint team can handle that evidence.
**** Unremedied material weakness in internal controls, a "going concern" warning and a highly problematic penny stock auditor of past stock promotions.Auditor Thayer O'Neal is simply a renamed "spin off" from previous auditor who was dissolved by the PCAOB for gross audit deficiencies.
PJC1 Thursday, 04/13/17 07:23:37 PM Re: None Post # 25368 of 25370 Go Nymox's auditor, Thayer O'Neal, was created as a direct spinoff of LL Bradford, when that firm was recently shut down by the PCAOB for multiple gross audit deficiencies. The new "spin off" auditor simply changed its name and picked up LL Bradford's troubled clients, all of which (aside from Nymox) have imploded to just pennies.
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