Company: RILYN
Filing Date: 2025-09-19
Form Type: 10-K
Source: 0001464790-25-000011
Chunk: 311

Company: B. Riley Financial, Inc.
Filing Date: 2025-09-19
Form: 10-K
Item: Item 8
Chunk 311
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 to journal entry controls. There was a lack of segregation of duties considerations associated within the journal entry approval workflow.  The workflow in the system did not systemically prevent individuals who can post journal entries to also approve the same entries. Additionally, the Company did not retain evidence of review of certain journal entries.

Prior to filing this Annual Report on Form 10-K, we completed significant additional procedures for the year ended December 31, 2024. Based on these procedures, management believes that our consolidated financial statements included in this Form 10-K have been prepared in accordance with GAAP. Our Co-Chief Executive Officers and Chief Financial Officer have certified that, based on their knowledge, the financial statements, and other financial information included in this Form 10-K, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Form 10-K.

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Table of Contents

Remediation Plan for Current Period Material Weaknesses

Management has begun to implement and plans to continue implementing measures designed to ensure that the control deficiencies contributing to the material weaknesses, described above, are remediated, such that the controls are designed, implemented, and operating effectively. The remediation actions for the material weaknesses noted above include:  

•Prior to December 31, 2024, the Retail Solutions material weakness was remediated through the divestiture of the business in November 2024. 

•Implementation and enhancement of its ITGCs and related policies. This includes providing resources, training and support to process owners and reviewers with a specific focus on understanding the risks being addressed by the controls they are performing, as well as requirements for sufficient documentation and evidence in the execution of the controls.

•Updating of its IT policies and procedures to enhance user access, change management, and IT operations processes to ensure timely and accurate assignment of access rights and prompt removal of access for terminated employees, and to ensure appropriate restriction of access rights based on job responsibilities.

•Designing of alternative processes and controls to mitigate the risk of the third-party services providers not producing the SOC 1 Type 2 reports.

•Implementation of measures designed to ensure controls are appropriately designed, implemented, and operating effectively as it relates to the material weakness identified in investment valuations, related party transactions, income taxes, goodwill impairment assessment, and journal entries. The remediation actions include the improvement of the precision level of management review controls, documentation retention and additional resources.

While the foregoing measures are intended to effectively remed