B. Riley Financial Inc.'s stock witnessed a surge following the belated release of its annual report, providing both validation for its supporters and ammunition for critics questioning its accounting practices.

According to AdvisorHub, the report highlighted significant material weaknesses in the company's internal controls, with some previously reported data being revised. Additionally, a new investigation commissioned by B. Riley found no connection between the firm and the legal issues of former client Brian Kahn, which was linked to the 2020 collapse of a hedge fund.

The delayed filing, which saw B. Riley miss its March deadline and necessitated an extension from lenders, exacerbating investor concerns. While the report's release temporarily eased pressure on the firm, it also fueled skepticism regarding its financial transparency and disclosure practices.

AdvisorHub also reports that auditors cited issues such as B. Riley's valuation of investments and identification of related party transactions, echoing criticisms from short sellers who have bet against the stock.

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