Business Context and Reporting Period
This Form 8-K Current Report was filed by Broadwind Energy, Inc. on March 7, 2016, covering events occurring on March 1 and March 2, 2016. The filing 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. The document focuses exclusively on corporate governance and audit firm changes.
Material Changes
- Dismissal of Auditor: On March 2, 2016, the Company dismissed KPMG LLP as its independent registered public accounting firm. This decision was approved by the Audit Committee.
- Engagement of New Auditor: Contemporaneously with the dismissal of KPMG, the Audit Committee engaged RSM US LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2016.
- Audit Opinions: KPMG's reports for fiscal years 2015 and 2014 did not contain adverse opinions, disclaimers, or qualifications regarding uncertainty, audit scope, or accounting principles.
- Disagreements: The Company reported no "disagreements" or "reportable events" with KPMG during the fiscal years 2014 and 2015, or the interim period through March 2, 2016.
Guidance, Risks, and Contingencies
The filing references historical material weaknesses in internal controls previously disclosed in the Company's 10-Q and 10-K filings:
- 2014 Weaknesses: Related to journal entries, inventory accruals, ethical values, inventory costing/valuation, and revenue recognition guidance. These were remediated during 2014.
- 2015 Weakness: Related to the maintenance of effective controls over the completeness, accuracy, and existence of inventory.
No forward-looking guidance or new risk factors were introduced in this specific filing.
Investor Verification Checklist
- Verify the reasons for the change in auditors by reviewing the attached letter from KPMG LLP (Exhibit 16.1).
- Review the Company's most recent 10-K and 10-Q filings to assess the status of the material weakness regarding inventory controls noted for 2015.
- Confirm the transition timeline and scope of work for the new auditor, RSM US LLP.
- Monitor future filings for any restatements or additional disclosures related to the inventory controls previously identified.