Has Benihana determined any instances of inappropriate application of technical accounting pronouncements for certain transactions and disclosures?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- In certain instances, the Company determined there was inappropriate application of technical accounting pronouncements for certain transactions and disclosures.
These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2021, of the Company, and this report does not affect our report on such financial statements.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, in certain instances, Benihana determined there was inappropriate application of technical accounting pronouncements for certain transactions and disclosures. This determination was part of a broader assessment of internal control weaknesses identified by the company.
These weaknesses, along with the inappropriate application of accounting pronouncements, were considered when determining the audit tests applied to Benihana's consolidated financial statements for the year ending December 31, 2021. The report by Deloitte & Touche LLP, the independent registered public accounting firm, does not affect their report on such financial statements.
Benihana has taken steps to remediate these issues, including redesigning controls over journal entries to ensure proper segregation of duties. They have also increased precision in control activities related to payroll, accounts payable, and property and equipment, and improved IT user access security. Benihana believes these steps have improved the effectiveness of their internal control over financial reporting.