Freedom Holding Corp. (FRHC): auditor change — Freedom Holding Corp. non-reliance on FY2022 and Q1-Q3 FY2023 financials due to revenue misclassification

Freedom Holding Corp.

Audit committee concluded prior financials (FY2022, Q1-Q3 FY2023) are unreliable due to misclassification of margin lending interest income.
Error: interest income from margin lending was presented as fee and commission income instead of interest income; no net income impact.
Material weakness in internal controls identified for income statement classification; also outstanding cash flow classification issue from Nov 2022.
Company intends to restate the affected financial statements as soon as practicable.
Previous non-reliance (Nov 2022) for cash flow classification has not yet been restated.

item 4.02 item 9.01

Key facts

Extracted from this filing and checked against the source text.

Auditor Changes SEC 8-K Item 4.01/4.02 confidence 0.9

Freedom Holding Corp. reported that prior financial statements should not be relied upon.

Action: non reliance

Exact text from the filing

e 30, 2022 and September 30, 2022 (collectively the “Prior Financial Statements”), and any reports, related earnings releases, investor presentations or similar communications of the Company’s Prior Financial Statements should no longer be relied upon. The determination resulted from an error in the Prior Financial Statements identified by the Company related to the classification of certain interest income derived from margin lending made by subsidiaries of the Company within the Company’s income statement. Specifically, the Company determined that, in the Consolidated Statements of Operations and Other Comprehensive Income in the Prior Financial Statements, certain interest income from margin lending was presented as “Fee and commission income” whereas it should have been presented as “Interest income,” and that this misclassification of revenue should be restated through amendments to

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Source: SEC EDGAR

accession 0000924805-23-000004

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