We are desperately trying to finish up a new comprehensive audit fee database. One of the fields is the AUDIT REPORT DATE. But then we run into issues like this one. Here is a screenshot of the audit signature following the audit report included in New Concept Energy’s 10-K for the FYE 12/31/2024. Here is a link to the filing CIK 105744 10-K.
The dissemination date of this 10-K was 3/24/2025. Approximately one year and one week after the signature date. We discovered this while stress testing our data collection strategies. We have a fairly robust regular expression to use to find these dates – but the discrepancy between the dissemination date and the audit report date warranted further research (we don’t know how we make mistakes until we find the mistakes).
So now the question is what to do about this? I wonder if this is a clue (gosh I hate giving away this research idea) but anyway, is this a clue that the “Company’s internal control over financial reporting was effective ineffective as of December 31, 2024.” Note, the quote is from the 10-K but the date issue, while perhaps trivial might be evidence that the company does not have effective controls. I started this paragraph wondering what we should do about this. We have a couple of choices:
- Leave as is.
- Leave as is and flag.
- Make an educated guess and change the date to 3/17/2025.
- Leave the field blank.
I think what we need to do is confirm that we correctly pulled the value that is being asserted, audit report date (in this case) – and leave the value if we have collected it correctly but flag the issue.
I teased in the middle of the prior paragraph – it is kind of interesting the number and nature of errors that we find. Could this be evidence of ineffective controls in that the company does not have enough staff to carefully review and evaluate their disclosures?