Consumer Capital Group Inc. determined that certain of its previous financial statements should no longer be relied upon due to accounting errors, which may be material, related to the effect of foreign currency transaction adjustments on the company's comprehensive loss.
Consumer Capital said it erroneously presented foreign currency translation adjustments of $524,258 and $130,050 as gains on its condensed consolidated statements of operations and comprehensive loss for the three- and six-month periods ended June 30, respectively, instead of reflecting them as foreign currency translation adjustment losses. It also presented a foreign currency translation adjustment of $394,208 as a loss for the three-month period ended March 31 when it should have been reflected as a foreign currency translation adjustment gain.
The company said it plans to amend the misstatements as soon as practicable.
Similar errors were also made in the company's disclosures for the fiscal quarters ended March 31, 2018, and June 30, 2018, and for the fiscal year ended Dec. 31, 2018. However, based on its review of such periodic reports, Consumer Capital concluded that the errors in presenting foreign currency translation adjustments in its periodic reports during the 2018 fiscal year are not material on an annualized basis. The company does not currently intend to amend its fiscal 2018 annual report, though it did amend and restate its consolidated statements of operations and comprehensive loss for that fiscal year.
The company's management determined that the errors were caused by material weaknesses in its internal control over financial reporting and has discussed the matter with its independent public accounting firm.
