Business Context and Reporting Period
This Form 8-K filing by CareTrust REIT, Inc. (CareTrust) reports a change in its independent registered public accounting firm. The report date is February 25, 2019, covering events occurring between February 25 and February 28, 2019.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. It is a disclosure regarding corporate governance and audit oversight.
Material Changes
- Dismissal of Auditor: On February 25, 2019, the Audit Committee dismissed Ernst & Young LLP (E&Y) as the Company's independent registered public accounting firm.
- Appointment of New Auditor: On February 27, 2019, the Audit Committee appointed Deloitte & Touche LLP (Deloitte) as the new independent registered public accounting firm for the fiscal year ending December 31, 2019.
- Audit History: E&Y's reports for fiscal years 2017 and 2018 contained no adverse opinions, disclaimers, or qualifications.
Management Commentary, Risks, and Contingencies
The Company stated that the dismissal of E&Y followed a comprehensive process. Management confirmed that during the fiscal years ended December 31, 2017 and 2018, and the interim period through the dismissal date:
- There were no "disagreements" with E&Y regarding accounting principles, practices, financial statement disclosure, or auditing scope.
- There were no "reportable events" as defined by Regulation S-K.
Regarding the new appointment, the Company confirmed that neither it nor anyone acting on its behalf consulted Deloitte regarding accounting principles or matters that would constitute a disagreement or reportable event prior to the appointment.
Investor Verification Checklist
- Verify the content of the letter from Ernst & Young LLP (Exhibit 16.1) dated February 28, 2019, to confirm their perspective on the dismissal.
- Monitor future filings for the transition plan and timeline for Deloitte's audit of the 2019 fiscal year.
- Review subsequent 10-Q or 10-K filings to ensure no undisclosed disagreements or reportable events are later revealed.