8-KOther Events

AVALONBAY COMMUNITIES INC 8-K Report (May 31, 2002)

Filed May 31, 2002For Securities:AVB

Summary

AvalonBay Communities, Inc. (AVB) has announced a change in its principal independent accountant, dismissing Arthur Andersen LLP and engaging Ernst & Young LLP, effective May 29, 2002. This change was recommended by the Audit Committee and approved by the Board of Directors. Importantly, the company states there were no disagreements with Arthur Andersen on any accounting principles, practices, financial statement disclosures, or auditing procedures during the relevant periods. Arthur Andersen's reports for the years ended December 31, 2001 and 2000 were unqualified. This transition signifies a routine change in accounting firms and does not appear to stem from any accounting disputes or issues.

Key Highlights

  • 1Change in Principal Independent Accountant: Arthur Andersen LLP has been dismissed, and Ernst & Young LLP has been engaged.
  • 2Effective Date: The change in accountants is effective as of May 29, 2002.
  • 3Audit Committee and Board Approval: The decision to change accountants was recommended by the Audit Committee and unanimously approved by the Board of Directors.
  • 4No Disagreements with Prior Accountant: AvalonBay stated there were no disagreements with Arthur Andersen on accounting matters, disclosures, or auditing procedures.
  • 5Unqualified Prior Audit Reports: Arthur Andersen's audit reports for FY2001 and FY2000 were without adverse or qualified opinions.
  • 6No Prior Engagements with New Accountant: Ernst & Young had not previously audited AVB or its subsidiaries, nor had they been consulted on specific accounting matters.
  • 7Exhibit Filed: A letter from Arthur Andersen LLP confirming the statements regarding the change in accountants is included as Exhibit 16.1.

Frequently Asked Questions

AvalonBay announced the dismissal of Arthur Andersen LLP and the engagement of Ernst & Young LLP as its principal independent accountant. This decision was recommended by the Company's Audit Committee and approved by its Board of Directors. The company has stated there were no disagreements with Arthur Andersen on any accounting or auditing matters.

No, the company explicitly stated that Arthur Andersen's reports on the financial statements for the years ended December 31, 2001, and 2000, did not contain any adverse opinions, disclaimers of opinion, or modifications. Furthermore, there were no disagreements with Arthur Andersen on any matters of accounting principles, practices, financial statement disclosure, or auditing scope or procedures.

Changing accounting firms, especially when there are no stated disagreements, is often a routine business decision. Investors should note that the transition for AvalonBay appears to be without underlying accounting disputes. This change involves Ernst & Young LLP taking over as the principal independent accountant moving forward.

According to the filing, Ernst & Young had not been engaged to audit AvalonBay's financial statements or those of its subsidiaries, nor had they been consulted on specific accounting matters during the periods reviewed. This marks their initial engagement as the principal independent accountant.