Business Context and Reporting Period
This Form 8-K is a current report filed by American Electric Power Company, Inc. (AEP) and its subsidiary registrants (Appalachian Power Company, Indiana Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma, and Southwestern Electric Power Company). The report date is July 26, 2016, covering the decision regarding the company's independent registered public accounting firm.
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 regarding the external auditor.
Material Changes
The primary material change reported is the replacement of the independent registered public accounting firm:
- Dismissed Firm: Deloitte & Touche LLP was not renewed for the audit of the fiscal year ending December 31, 2017.
- Appointed Firm: PricewaterhouseCoopers LLP was appointed to audit the financial statements for the fiscal year ending December 31, 2017.
- Process: The Audit Committee conducted a competitive bidding process involving several firms, including Deloitte & Touche LLP, before selecting PricewaterhouseCoopers LLP.
- Effective Date: The dismissal of Deloitte & Touche LLP becomes effective upon the completion of their procedures for the year ending December 31, 2016, and the filing of the related Form 10-K.
Management Commentary, Risks, and Contingencies
Audit History and Disagreements:
- Audit reports for fiscal years 2014 and 2015 contained no adverse opinions, disclaimers, or qualifications regarding uncertainty, scope, or accounting principles.
- There were no disagreements between AEP and Deloitte & Touche LLP on accounting principles, practices, financial statement disclosures, or auditing scope/procedures during the two most recent fiscal years and the interim period through July 26, 2016.
- There were no reportable events as defined by Item 304(a)(1)(v) of Regulation S-K.
Consultation with New Auditor:
- AEP and its subsidiaries did not consult with PricewaterhouseCoopers LLP regarding matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K during the fiscal years ended December 31, 2014 and 2015, or the interim period through July 26, 2016.
Investor Verification Checklist
- Verify the letter from Deloitte & Touche LLP (Exhibit 16.1) confirming their agreement with the statements regarding the lack of disagreements and reportable events.
- Monitor the upcoming Form 10-K filing to confirm the transition of audit responsibilities to PricewaterhouseCoopers LLP.
- Review future filings for any changes in audit scope or accounting principles resulting from the change in auditors.