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LI firm that warned of financial report errors replaces auditor, it says in SEC filing

Janel's offices in Lynbrook, seen on Oct. 11,

Janel's offices in Lynbrook, seen on Oct. 11, 2018. Credit: Newsday / Alejandra Villa Loarca

A publicly traded Long Island holding company that last month warned its recent financial statements contained errors has replaced its auditor, according to a government filing.

In January, Lynbrook-based Janel Corp. said that its financial statements from fiscal 2016, 2017 and most of 2018 were not reliable.

A filing after Friday's market close said the company dismissed Crowe LLP, based in Livingston, New Jersey, as its principal public accounting firm.

The same day, the filing said, Janel hired Prager Metis CPAs LLC, with offices in Manhattan, Woodbury and elsewhere, as its auditor for the fiscal years ending Sept. 30, 2018, and 2019.

Janel shares fell 1.1 percent to close Monday at $7.90 and remained at that price at Tuesday's market close. 

The Securities and Exchange Commission filing said Janel and Crowe disagreed about the "financial terms" for "significantly" increasing the scope of work on the audit of the fiscal year ended Sept. 30, 2018.

Although it did not complete the audit for that period, Crowe said Janel lacked adequate controls over revenue recognition, cash disbursements and credit policies.

A call to the number listed as Janel's principal executive offices yielded a recorded message that the mailbox was full. A call to the mobile phone of chief executive Dominique Schulte was not returned.

Janel's subsidiaries include a logistics services company and a provider of commercial mixers, shakers and stirrers.

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