Grant Thornton LLP, an independent audit, tax and advisory firm, recently resigned from its post as independent registered public accounting firm for AR Capital sponsored non-traded direct investments.
The accounting firm’s name surfaced late last year regarding the accounting scandal that’s plagued American Realty Capital Properties (ARCP), a publicly traded REIT that owns Cole Capital, a sponsor to non-traded REITs. ARCP and AR Capital are unaffiliated entities but have common roots and ownership.
Lisa McAlister, the former Chief Accounting Officer of ARCP has claimed that she addressed concerns of the accounting irregularities with Grant Thornton, the REIT’s accounting firm, but was ignored, according to reports.
Since the scandal, AR Capital has seen a drop in equity inflows into its offerings.
The filings by the AR Capital sponsored investments provide no reason for the resignation.
“There were no disagreements between [AR Capital sponsored investments] and Grant Thornton on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grant Thornton, would have caused Grant Thornton to make reference to the subject matter of the disagreement in its report on [any of the] consolidated financial statements,” explained the company in the filings.
A couple of AR Capital’s non-traded REITs, American Realty Capital Daily Net Asset Value Trust, Inc and American Realty Capital Trust V, Inc., are in discussions with Cohn Reznick LLP to replace Grant Thornton.
American Energy Capital Partners LP has had discussions with Hein & Associates LLP and will file an 8-K if and when an agreement has been reached.
Other AR Capital investment programs including its two BDC offerings, indicated they are in talks to select and retain a new accounting firm, but had not mentioned a company by name.