Business Context and Reporting Period
This Form 8-K filing by Graphic Packaging Holding Company (GPK) was submitted on December 18, 2019, reporting events that occurred on December 12, 2019. The filing primarily addresses a change in the Company's independent registered public accounting firm.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on corporate governance and audit matters.
Material Changes
- Dismissal of Auditor: The Audit Committee approved the dismissal of Ernst & Young LLP (EY) as the independent registered public accounting firm, effective following the conclusion of the audit for the fiscal year ending December 31, 2019.
- Engagement of New Auditor: PricewaterhouseCoopers LLP (PwC) was engaged as the independent registered public accounting firm for the fiscal year ending December 31, 2020, subject to standard client acceptance procedures.
- Historical Audit Opinions: EY's reports for the years ended December 31, 2018, and 2017 were unqualified and did not contain adverse opinions, disclaimers, or modifications regarding uncertainty, scope, or accounting principles.
- Disagreements: There were no disagreements with EY regarding accounting principles, practices, financial statement disclosures, or auditing scope/procedures during the relevant periods.
Outlook, Risks, and Contingencies
Internal Control Remediation: The filing references a material weakness in internal control over financial reporting identified during the 2018 audit. This weakness related to management review controls for accounting for business combinations, specifically concerning the complex combination with the North America Consumer Packaging business of International Paper Company. The Company disclosed that this weakness was remediated in the first quarter of 2019.
Consultations with New Auditor: The Company confirmed that neither it nor anyone on its behalf consulted PwC regarding accounting principles, audit opinions, or matters involving disagreements or reportable events prior to PwC's engagement.
Investor Verification Checklist
- Verify the effective date of the transition from EY to PwC to ensure continuity in the 2019 fiscal year audit.
- Confirm the status of the remediation of the 2018 material weakness in internal controls in subsequent filings (e.g., 2019 10-K).
- Review the attached letter from EY (Exhibit 16.1) to confirm their agreement with the Company's statements regarding the dismissal.
- Monitor future filings for any new "reportable events" or disagreements that may arise during the transition period.