Item 4.01. Changes in Registrant's Certifying Accountant
On December 31, 2021, and following a competitive request for proposals process,
the Audit Committee (the "Committee") of the Board of Directors of Tuesday
Morning Corporation (the "Company") approved the engagement of Grant Thornton
LLP ("GT") as its independent registered public accounting firm for the fiscal
year ending June 30, 2022. The Committee also approved the dismissal of Ernst &
Young, LLP ("EY") as independent registered public accounting firm of the
Company effective December 31, 2021.
The reports of EY on the Company's financial statements for the fiscal years
ended June 30, 2021 and 2020 did not contain an adverse opinion or a disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope, or
accounting principles.
During the fiscal years ended June 30, 2021 and 2020, and in the subsequent
interim period through December 31, 2021: (i) there were no disagreements (as
defined in Item 304(a)(iv) of Regulation S-K and the related instructions) with
EY on any matters of accounting principles or practices, financial statement
disclosure, or auditing scope and procedures which, if not resolved to the
satisfaction of EY would have caused EY to make reference to the matter in their
report and (ii) except for the matters referenced below, there were no
reportable events (as defined in Item 304(a)(v) of Regulation S-X and the
related instructions).
EY's report on the consolidated financial statements of the Company for the year
ended June 30, 2020 contained an explanatory paragraph stating there was
substantial doubt about the Company's ability to continue as a going concern.
In connection with the preparation of the Company's audited consolidated
financial statements for the year ended June 30, 2020, the Company identified a
material weakness in internal controls over financial reporting with respect to
its period-end financial closing process. The material weakness related to an
ineffective assessment of impairment of long-lived assets. Management's
estimation of fair value did not appropriately utilize market participant
assumptions. The material weakness resulted in a material misstatement in our
June 30, 2020 consolidated financial statements which was identified and
corrected prior to filing. There were no restatements of prior period financial
statements and no change in previously released financial results were required
as the result of the control deficiency. The Company identified and implemented
a number of procedures to remediate the underlying causes of the control
deficiencies that gave rise to the material weakness. Based on these actions,
the Company concluded that this material weakness had been remediated by June
30, 2021.
In accordance with Item 304(a)(3) of Regulation S-K, the Company has provided EY
with a copy of the above statements and has requested EY to furnish it a letter
addressed to the Commission stating whether it agrees with the above statements.
A copy of that letter, dated January 3, 2022 is filed as Exhibit 16.1 to this
Form 8-K.
During the fiscal years ended June 30, 2021 and 2020 and the subsequent interim
period through December 31, 2021, neither the Company nor anyone acting on the
Company's behalf consulted GT regarding: (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 neither a written report nor oral advice was provided to the Company that GT
concluded was an important factor considered by the Company in reaching a
decision as to any accounting, auditing, or financial reporting issue, or (ii)
any matter that was either the subject of a disagreement (as defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable
event (as defined in Item 304(a)(1)(v) of Regulation S-K and the related
instructions).
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Item 9.01. Financial Statements and Exhibits
(d)
Exhibits
Exhibit Number Description
16.1 Letter of EY, dated January 3, 2022
104 Cover Page Interactive Data File (embedded within the Inline
XBRL Document)
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