Business Context and Reporting Period
This Form 8-K filing by Oaktree Specialty Lending Corporation reports a change in its independent registered public accounting firm. The report date is January 8, 2018, covering the earliest event date of January 4, 2018.
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 and audit firm transitions rather than financial performance data.
Material Changes
- Resignation of Auditor: PricewaterhouseCoopers LLP (PwC) resigned as the independent registered public accounting firm effective January 4, 2018.
- Engagement of New Auditor: Ernst & Young LLP (EY) was engaged as the new independent registered public accounting firm effective January 4, 2018.
- Audit History: PwC's audit reports for fiscal years ended September 30, 2017, and 2016, contained no adverse opinions, disclaimers, or qualifications.
- Disagreements: There were no disagreements with PwC regarding accounting principles, practices, or audit scope during the relevant periods.
Outlook, Risks, and Contingencies
Material Weakness Disclosure: The filing reiterates a previously disclosed material weakness in internal control over financial reporting. The Company did not design or maintain effective controls to internally communicate current accounting policies and procedures, including the nature of supporting documentation required to validate certain portfolio company data.
Successor Engagement: The Audit Committee has authorized PwC to respond fully to inquiries from EY regarding the material weakness. No consultations occurred with EY regarding accounting principles or reportable events prior to their engagement.
Investor Verification Checklist
- Verify the status of remediation efforts for the disclosed material weakness in internal controls over financial reporting.
- Confirm the transition timeline and scope of work between PwC and EY.
- Review the letter from PwC (Exhibit 16.1) for any additional context regarding the resignation.
- Monitor future filings for any new disagreements or reportable events involving the new auditor.