8-KFinancial Events

Apple Inc. 8-K Report, Auditor Change (Feb 27, 2009)

Filed February 27, 2009For Securities:AAPL

Summary

This Form 8-K filing from Apple Inc. announces a significant change in its independent auditor. Effective February 26, 2009, Apple's Audit Committee has engaged Ernst & Young LLP (EY) to serve as the company's independent registered public accounting firm for the remainder of fiscal year 2009, replacing KPMG LLP, which had served in that capacity since fiscal 1997. This change follows a competitive review process conducted by the Audit Committee as part of its previously announced policy to review auditor appointments every five years. The filing clarifies that the dismissal of KPMG was not due to any disagreements on accounting principles, financial statement disclosures, or auditing procedures, nor were there any "reportable events" as defined by SEC regulations. KPMG's audit reports for fiscal years 2007 and 2008 did not contain adverse, qualified, or disclaimed opinions, though they did note Apple's adoption of new accounting standards for income taxes and share-based payments. EY was engaged after a review of auditor independence and commercial relationships, with no impairments found.

Key Highlights

  • 1Apple Inc. has changed its independent registered public accounting firm, appointing Ernst & Young LLP (EY) and dismissing KPMG LLP.
  • 2The change is effective February 26, 2009, for the remainder of fiscal year 2009.
  • 3This decision resulted from a competitive review process undertaken by Apple's Audit Committee, as per its five-year auditor review policy.
  • 4KPMG LLP had served as Apple's independent auditor since fiscal year 1997.
  • 5There were no disagreements with KPMG on accounting principles, financial statement disclosures, or auditing procedures.
  • 6No 'reportable events' (as defined by Regulation S-K) occurred with KPMG during the relevant periods.
  • 7EY's independence was assessed and confirmed by the Audit Committee prior to engagement.

Frequently Asked Questions

Apple changed its auditor as part of a regular, five-year review of its independent registered public accounting firm by the Audit Committee. This review involved a competitive process, leading to the selection of Ernst & Young LLP over the incumbent, KPMG LLP.

No, the filing explicitly states that there were no disagreements with KPMG on any matters of accounting principles, financial statement disclosure, or auditing scope or procedure. Additionally, there were no 'reportable events' as defined by SEC regulations.

KPMG LLP had been Apple Inc.'s independent registered public accounting firm since fiscal year 1997, a tenure of over a decade before the change.

The change in auditor, while routine under Apple's policy, signifies a fresh perspective on the company's financial statements. The careful review process for auditor independence suggests a continued commitment to robust financial reporting and governance. Investors can take comfort in the fact that this transition was managed proactively and transparently, with no underlying issues identified with the prior auditor.