Business Context and Reporting Period
This Form 8-K filing by EVERTEC, Inc. is dated March 20, 2015. The report discloses a change in the Company's independent registered public accounting firm. The filing was signed by the Chief Financial Officer on March 26, 2015.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on governance and audit matters.
Material Changes
- Dismissal of Prior Auditor: On March 20, 2015, the Audit Committee dismissed PricewaterhouseCoopers LLP (PwC) as the independent registered public accounting firm following a competitive proposal process initiated on December 8, 2014.
- Appointment of New Auditor: On March 20, 2015, the Audit Committee selected Deloitte & Touche LLP (Deloitte) as the new independent registered public accounting firm for the fiscal year ending December 31, 2015.
- Audit Opinions: PwC's audit reports for the fiscal years ended December 31, 2014, and 2013, did not contain adverse opinions, disclaimers, or qualifications regarding uncertainty, scope, or accounting principles.
- Disagreements: There were no disagreements with PwC regarding accounting principles, practices, financial statement disclosure, or auditing scope/procedures during the relevant periods.
Guidance, Risks, and Contingencies
Material Weakness in Internal Controls: The filing discloses a material weakness in the Company's internal control over financial reporting as of December 31, 2014. This weakness stemmed from inadequate segregation of duties within the accounting system, where certain individuals, including executive management, had access to prepare and post journal entries across substantially all key accounts without independent review.
Potential Impact: While this control deficiency did not result in financial statement adjustments for the year ended December 31, 2014, the Company noted it could result in misstatements to accounts and disclosures that would not be prevented or detected.
Consultation with New Auditor: The Company confirmed it had not consulted with Deloitte regarding accounting principles or reportable events prior to their selection. PwC has been authorized to discuss the control deficiency with Deloitte.
Investor Verification Checklist
- Verify the ratification of Deloitte & Touche LLP by stockholders at the 2015 annual meeting.
- Review the Company's remediation plan for the material weakness regarding segregation of duties in internal controls.
- Examine the letter from PwC filed as Exhibit 16 to confirm their agreement with the statements made in this filing.
- Monitor future filings for any financial statement adjustments resulting from the identified control deficiency.