Donald Trump’s social-media company just became the most valuable publicly traded client of an accounting firm that has more experience auditing companies traded over-the-counter and has had a string of regulatory issues, including a 100% deficiency rate on audits reviewed by a U.S. watchdog.
Trump Media & Technology Group Corp. said in recent regulatory filings that it will keep BF Borgers, a Lakewood, Colorado-based accounting firm, as its auditor after starting to trade publicly late last month. A Canadian regulator said last year that BF Borgers violated its rules for auditors, while the U.S.’s Public Company Accounting Oversight Board found multiple deficiencies in every audit it reviewed from the firm over the past two annual checks.
Closely held companies often retain audit firms after going public through mergers with blank-check companies. But most of BF Borgers’s clients, such as Lingerie Fighting Championships Inc., a mixed martial arts league, are significantly smaller than Trump’s media business. Its deficiency rate from the PCAOB was worse than the industry rate of 40% in 2022, and the December enforcement action from Canada’s audit regulator prevents it from accepting new clients in that country until it makes certain improvements.
Curtis Means/Photographer: Curtis Means/Getty
A representative for BF Borgers didn’t respond to multiple requests for comment.
Trump Media said in a statement that articles about BF Borgers’ record were partisan and “preemptively attacking our auditors before they’ve even begun their work for us as a public company.”
TMTG has used the firm since 2022 as it sought to go public by merging with Digital World Acquisition Corp., a special purpose acquisition company. PCAOB inspections haven’t yet covered BF Borgers’ audits of Trump Media.
Trump owns most of TMTG’s stock, and its listing on the Nasdaq netted the former president a multibillion-dollar windfall. After a surge in its share price the company is now valued at roughly $5 billion. Shares in the company fell 10% to $36.52 at 1:04 p.m. in New York on Monday.
Audit report card
Small or foreign audit firms often have high deficiency rates, and are typically only examined every three years by PCAOB inspectors. However, BF Borgers is a prolific auditor with more frequent examinations. Last year, it ranked No. 8 on a list of audit firms with the most publicly traded clients, with just nine fewer clients than midtier firm BDO USA, according to research firm Ideagen Audit Analytics. Among the 10 busiest auditing firms, Withum Smith+Brown had an 80% deficiency rate and BDO had a 66% rate in 2022, according to the audit regulator.
About 84% of BF Borgers’ clients were traded over-the-counter, meaning they don’t meet the listing requirements of large exchanges. Less than 30 traded on either the Nasdaq or the New York Stock Exchange, according to Ideagen.
The PCAOB said that BF Borgers more than doubled its clients between 2019 and 2021. (It led the field in terms of
Deficiencies found
Congress created the PCAOB to oversee the work of auditors and restore investor confidence in corporate accounting, tapping the Securities and Exchange Commission to appoint its members. The regulator’s inspections look at a small sample of client audits. They measure whether auditors had sufficient evidence to back up their assessments of companies’ financial statements, providing a performance gauge for corporate directors and investors.
Negative findings from the regulator indicate flawed processes or technical violations of the board’s rules.
The Washington-based audit regulator
In 2022, the PCAOB placed a two-year ban on
— With assistance from Bailey Lipschultz
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