Business Context and Reporting Period
This Form 8-K Current Report is filed by Franklin BSP Realty Trust, Inc. (FBRT) for the reporting period ending May 31, 2023. The filing primarily addresses a change in the Company's independent registered public accounting firm.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses exclusively on corporate governance regarding the external auditor.
Material Changes
Change in Certifying Accountant
- Dismissal: On May 31, 2023, the Audit Committee dismissed Ernst & Young LLP (EY) as the independent registered public accounting firm, effective immediately.
- Engagement: On May 31, 2023, the Audit Committee engaged PricewaterhouseCoopers LLP (PWC) as the new independent registered public accounting firm, effective immediately.
- Scope: PWC will perform audit services for the fiscal year ended December 31, 2023, including the quarterly period ended June 30, 2023.
Management Commentary and Risks
Audit History and Disagreements
Management confirmed that EY's audit reports for the fiscal years ended December 31, 2022, and 2021 did not contain any adverse opinions, disclaimers, or qualifications regarding uncertainty, audit scope, or accounting principles.
During the fiscal years 2021 and 2022, and the interim period through May 31, 2023:
- There were no "disagreements" between the Company and EY on accounting principles, practices, financial statement disclosure, or auditing scope/procedure.
- There were no "reportable events" as defined by Regulation S-K.
Consultation with New Auditor
The Company did not consult with PWC regarding any matters set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K during the relevant periods, including the application of accounting principles or the type of audit opinion that might be rendered.
Investor Verification Checklist
- Verify the effective date of the auditor transition (May 31, 2023) and the specific fiscal periods PWC will cover.
- Review the attached letter from EY (Exhibit 16.1) to confirm their concurrence with the Company's statements regarding the lack of disagreements.
- Monitor future filings (10-Q and 10-K) to assess the impact of the auditor change on the audit process and financial reporting timeline.