Business Context and Reporting Period
This Form 8-K Current Report was filed by Globus Medical, Inc. on April 18, 2017, regarding events occurring on April 17, 2017. The filing addresses 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 focuses exclusively on the dismissal of the prior auditor and the engagement of a new auditor.
Material Changes
- Dismissal of Auditor: Grant Thornton LLP ("GT") was dismissed as the independent registered public accounting firm on April 17, 2017, with the approval of the Audit Committee.
- Engagement of New Auditor: Deloitte and Touche LLP ("Deloitte") was engaged as the independent registered public accounting firm for the fiscal year ending December 31, 2017.
- Audit History: GT's audit reports for fiscal years 2015 and 2016 did not contain adverse opinions or disclaimers regarding the financial statements. However, the 2016 audit report on internal control over financial reporting contained an adverse opinion due to a self-identified material weakness related to non-cash activities in depreciation.
- Disagreements: The Company reported no disagreements with GT on accounting principles, practices, or auditing scope. There were no "reportable events" other than the material weakness noted above.
Guidance, Outlook, and Risks
The filing does not provide financial guidance or outlook. The primary risk disclosed is the previously identified material weakness in internal controls over financial reporting regarding depreciation, which resulted in an adverse opinion from the former auditor. The Company confirmed there were no disagreements with GT regarding this weakness.
Investor Verification Checklist
- Verify the status of remediation efforts for the material weakness in internal controls related to non-cash depreciation activities.
- Review the letter from Grant Thornton LLP (Exhibit 16.1) to confirm their agreement with the Company's statements regarding the dismissal.
- Monitor future filings for the transition of audit responsibilities to Deloitte and any impact on the 2017 audit timeline.