Business Context and Reporting Period
This Form 8-K Current Report was filed by Banc of California, Inc. on March 1, 2019. The filing discloses a change in the Company's independent registered public accounting firm following a competitive review process conducted by the joint Audit Committee of the Company and its subsidiary, Banc of California, N.A.
Key Financial Metrics
The filing text does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. This report is strictly procedural regarding the appointment and dismissal of auditors.
Material Changes
- Dismissal of Auditor: The Audit Committee approved the dismissal of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2019.
- Engagement of New Auditor: The Audit Committee engaged Ernst & Young LLP as the new independent registered public accounting firm for the fiscal year ending December 31, 2019, subject to standard client acceptance procedures.
- Continued Role for KPMG: KPMG will continue to perform the compliance audit for the year ending December 31, 2018, in accordance with the U.S. Department of Housing and Urban Development Audit Guide.
Management Commentary, Risks, and Contingencies
Disagreements and Reportable Events: The Company stated there were no disagreements with KPMG regarding accounting principles, financial statement disclosure, or auditing scope during the two most recent fiscal years (2017 and 2018) and the interim period through March 1, 2019. Additionally, no "reportable events" occurred during this timeframe.
Audit Opinions: KPMG's audit reports for the fiscal years ended December 31, 2018, and 2017, did not contain any adverse opinions, disclaimers, or qualifications regarding uncertainty, audit scope, or accounting principles.
Consultations with New Auditor: The Company confirmed that neither it nor anyone on its behalf consulted with Ernst & Young regarding the application of accounting principles or the type of audit opinion prior to the engagement.
Important Facts for Investor Verification
- Verify the completion of Ernst & Young's standard client acceptance procedures to confirm the final engagement.
- Review the letter from KPMG LLP (Exhibit 16.1) to confirm their agreement with the Company's statements regarding the dismissal.
- Monitor future filings for the transition of audit responsibilities and any potential impact on the timing of the 2019 financial statement release.