Business Context and Reporting Period
This Form 8-K Current Report was filed by China BAK Battery, Inc. (CBAK Energy Technology, Inc.) on August 4, 2006. The filing addresses a change in 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. The report focuses exclusively on the administrative change of auditors and the re-audit of historical financial statements.
Material Changes
- Change in Auditor: On May 15, 2006, the Company replaced Schwartz Levitsky Feldman LLP (SLF) with KPMG as its independent registered public accounting firm.
- Re-audit Initiated: KPMG was engaged to re-audit financial statements for the fiscal years ended September 30, 2003, 2004, and 2005.
- Board Ratification: On July 7, 2006, the Board of Directors ratified the appointment of KPMG for the fiscal year ending September 30, 2006, following a recommendation from the newly formed Audit Committee.
- Formal Engagement: A formal engagement letter was signed on August 2, 2006.
Outlook, Risks, and Management Commentary
Management confirmed that during the periods audited by SLF (fiscal years 2003-2005 and through May 10, 2006), there were no disagreements regarding accounting principles, financial statement disclosures, or auditing scope. Additionally, no "reportable events" as defined by Regulation S-K occurred during these periods. SLF provided a letter agreeing with these statements, which is filed as Exhibit 16.1.
Investor Verification Checklist
- Verify the status and findings of the KPMG re-audit for fiscal years 2003, 2004, and 2005.
- Review the letter from Schwartz Levitsky Feldman LLP (Exhibit 16.1) for any undisclosed qualifications.
- Monitor future filings for restated financial statements resulting from the re-audit.
- Confirm the composition and activities of the Audit Committee formed on May 15, 2006.