WageWorks Inc. delayed the filing of its annual report on Form 10-K for the year ended Dec. 31, 2017, after finding a material weakness in its internal control over financial reporting related to managing change and assessing risk in the areas of nonroutine and complex transactions.
The company said it cannot timely file its annual report on Form 10-K without unreasonable effort or expense as it needs additional time to complete its financial statements and assessment of its internal control over financial reporting. The company's independent registered accounting firm, KPMG LLP, has not yet completed its audits of the financial statements and the company's internal control over financial reporting as of Dec. 31, 2017.
The company said in a regulatory filing with the SEC that it is working on processes and controls to address the weakness. It plans to give a detailed description of the weakness, including a plan to fix the problem, in the Form 10-K.
The audit committee of the board is conducting an independent investigation of the company's internal control over financial reporting in fiscal 2016 and 2017. The investigation includes a review of certain issues such as revenue recognition related to the accounting for a government contract during fiscal 2016 and associated issues with whether there was an open flow of information and appropriate tone at the top for an effective control environment.
Additionally, WageWorks expects to receive a notice from the New York Stock Exchange that it is not in compliance with the exchange's continued listing requirements.