Business Context and Reporting Period
Dynatrace, Inc. filed this Form 8-K on June 3, 2022, reporting events occurring on May 31, 2022. The filing concerns a change in the company’s independent registered public accounting firm for the fiscal year ending March 31, 2023.
Auditor Change and Key Financial Information
- The Audit Committee dismissed BDO USA, LLP as the company’s independent registered public accounting firm effective May 31, 2022, following a competitive selection process.
- The Audit Committee approved the appointment of Ernst & Young LLP (EY) as successor auditor, subject to completion of standard client acceptance procedures and execution of an engagement letter.
- BDO’s audit reports on the financial statements for the fiscal years ended March 31, 2022 and March 31, 2021 contained no adverse opinion, disclaimer, qualification, or modification relating to uncertainty, audit scope, or accounting principles.
- The filing provides no current-period revenue, profit, cash flow, margin, debt, liquidity, or other operating metrics.
Material Changes Versus Prior Period
- The material change is the transition from BDO to EY beginning with the fiscal year ending March 31, 2023.
- Dynatrace reported no disagreements with BDO during the fiscal years ended March 31, 2022 or 2021, or during the interim period through May 31, 2022, regarding accounting principles, financial statement disclosure, or audit scope or procedures.
- Dynatrace also reported no new reportable events during those periods, except for a previously disclosed material weakness in internal control over financial reporting related to accounting for income taxes.
Management Commentary, Risks, and Unusual Items
- The prior material weakness involved controls over the preparation and review of the global tax provision, including the realizability of foreign tax credits and other domestic deferred tax assets.
- Management stated that the weakness was remediated as of March 31, 2021 through the use of tax specialists, enhanced documentation and management review, and improvements to the internal control environment.
- The weakness did not result in a misstatement of the company’s financial statements.
- BDO agreed with the company’s disclosures in a letter to the SEC dated June 3, 2022, filed as Exhibit 16.1.
- Before EY’s appointment, neither Dynatrace nor anyone acting on its behalf consulted EY regarding specified accounting transactions, potential audit opinions, disagreements, or reportable events.
Important Facts for Investors to Verify
- Confirm completion of EY’s client acceptance procedures and execution of the engagement letter.
- Review BDO’s Exhibit 16.1 letter and subsequent filings for any developments in the auditor transition.
- Verify the continued effectiveness of controls over income-tax accounting and whether any new material weaknesses are reported.
- Consult Dynatrace’s fiscal 2022 annual filing for the company’s financial results, liquidity, debt, cash flow, and other operating metrics, which are not included in this Form 8-K.