Business Context and Reporting Period
This Form 8-K filing by Entravision Communications Corporation is dated May 10, 2018. The report addresses a significant governance event: the dismissal of the company's independent registered public accounting firm, Grant Thornton LLP, by the Audit Committee of the Board of Directors.
Key Financial Metrics
The filing does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses exclusively on the change in the registrant's certifying accountant and related disclosures regarding internal controls.
Material Changes and Accounting Firm Dismissal
- Dismissal of Auditor: Grant Thornton LLP was dismissed as the independent registered public accounting firm on May 10, 2018.
- Prior Audit Opinions: Grant Thornton's reports for the years ended December 31, 2016, and 2017 did not contain adverse opinions, disclaimers, or qualifications regarding the consolidated financial statements.
- Internal Control Adverse Opinion: The audit report for the year ended December 31, 2017, contained an adverse opinion on the effectiveness of internal control over financial reporting.
- Material Weakness: The adverse opinion was due to a material weakness involving insufficient accounting resources and personnel to ensure proper application of U.S. GAAP and to effectively design and execute process-level controls for complex or non-recurring transactions.
- Disagreements: There were no disagreements with Grant Thornton on accounting principles, practices, or auditing scope during the relevant periods, other than the noted material weakness.
Outlook, Management Commentary, and Risks
The Audit Committee has approved the appointment of a new independent registered public accounting firm, though the engagement process was not formally completed as of the filing date. The company intends to disclose the engagement of the new firm once the process is complete. The primary risk highlighted is the previously identified material weakness in internal controls, which the company has authorized Grant Thornton to discuss with the successor auditor.
Investor Verification Checklist
- Verify the identity of the newly appointed independent registered public accounting firm once disclosed.
- Review the company's remediation plan for the material weakness regarding insufficient accounting resources and personnel.
- Examine the letter from Grant Thornton LLP (Exhibit 16.1) for any additional context regarding the dismissal.
- Monitor future filings for updates on the effectiveness of internal controls over financial reporting.