Compass Minerals International Inc. on Dec. 14 filed its Form 10-K after having reported to the SEC on Nov. 29 that it would be unable to file its Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2022, by the prescribed due date without unreasonable effort or expense, primarily because the company’s independent registered public accounting firm needed additional time to complete its audit procedures (GM Dec. 2, p. 27).
As anticipated, Compass found material weakness in certain areas, however, it said this did not result in any identified misstatements to its consolidated financial statements. It said there were no changes to previously released financial results.
As for the material weakness, it was found in three areas for the fourth-quarter ending Sept. 30, 2022:
1. The design and operating effectiveness of information technology general controls (ITGCs) related to certain systems that support the company’s internal controls over financial reporting. Specifically, the company did not maintain effective controls over privileged user access to certain systems. Automated and manual business process controls were therefore also deemed ineffective because they could have been adversely impacted by the ineffective ITGCs.
2. The design and operating effectiveness of controls related to the sales process. Specifically, the company did not maintain effective controls over pricing and order entry.
3. The design and operating effectiveness of controls related to the existence of inventory held at certain locations.
Compass said it is in the process of enhancing the design of certain internal controls over the sales and inventory processes and ITGCs related to privileged user access. It said the enhanced controls will be tested for effectiveness in future periods.