Business Context and Reporting Period
This Form 8-K Current Report was filed by Entravision Communications Corporation on August 8, 2022. The filing discloses a change in the Company's independent registered public accounting firm.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity metrics. It is a disclosure regarding auditor changes and historical audit opinions.
Material Changes
- Dismissal of Prior Auditor: On August 8, 2022, the Audit Committee dismissed BDO USA, LLP as the independent registered public accounting firm.
- Appointment of New Auditor: On August 12, 2022, the Company engaged Deloitte & Touche, LLP as the new independent registered public accounting firm.
- Historical Audit Opinions: BDO's reports for the years ended December 31, 2020, and 2021 did not contain adverse opinions on the consolidated financial statements. However, the 2020 report on internal control over financial reporting contained an adverse opinion due to material weaknesses in the Cisneros Interactive business unit.
Outlook, Risks, and Contingencies
Internal Control Weaknesses: The adverse opinion on internal controls for 2020 was attributed to management's failure to design and maintain controls over:
- Recording of opening balance sheet amounts related to the Cisneros Interactive acquisition.
- The revenue cycle of Cisneros Interactive.
- Reporting of accounts payable, accrued liabilities, income taxes, payroll expenses, and other operating expenses of Cisneros Interactive.
Disagreements and Reportable Events: The Company reported no disagreements with BDO on accounting principles or practices. The only reportable events were the previously disclosed material weaknesses related to Cisneros Interactive. No consultations occurred with Deloitte regarding accounting principles or reportable events prior to their engagement.
Investor Verification Checklist
- Verify the status of remediation efforts for the material weaknesses in internal controls related to Cisneros Interactive.
- Review the letter from BDO USA, LLP (Exhibit 16.1) to confirm their agreement with the Company's disclosures regarding the dismissal.
- Monitor future filings for the new auditor's (Deloitte) initial assessment of internal controls and financial reporting.
- Confirm that no undisclosed disagreements or reportable events exist between the Company and the former auditor.