Business Context and Reporting Period
This Form 8-K is a current report filed by Velocity Financial, Inc. on May 26, 2021. 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. It is a disclosure regarding auditor engagement.
Material Changes
- Auditor Change: The Audit Committee approved the engagement of RSM US LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2021.
- Termination of Prior Auditor: The engagement of KPMG LLP, the company's auditor for the previous ten years, ceased effective May 26, 2021.
- Prior Audit Opinions: KPMG's reports for fiscal years 2019 and 2020 did not contain adverse opinions, disclaimers, or qualifications regarding uncertainty, scope, or accounting principles, except for a modification noting the adoption of Accounting Standards Update 2016-13 (Credit Losses) effective January 1, 2020.
- Disagreements: There were no disagreements with KPMG on accounting principles, practices, or auditing scope during the relevant periods.
- Reportable Events: No reportable events occurred other than a previously disclosed material weakness in internal control over financial reporting (related to tax accounting controls) identified in the 2019 Form 10-K and remediated as disclosed in the 2020 Form 10-K.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future operations, or new risk factors. It confirms that the company did not consult with the new auditor, RSM US LLP, regarding accounting principles or audit opinions during the two most recent fiscal years or through the date of the report.
Investor Verification Checklist
- Verify the effective date of the auditor transition (May 26, 2021).
- Review the remediation status of the material weakness in internal controls over tax accounting disclosed in the 2020 Form 10-K.
- Confirm the absence of any undisclosed disagreements with the former auditor, KPMG LLP.
- Check the attached Exhibit 16 for KPMG LLP's letter confirming agreement with the company's disclosures.