8-KOther Events

EDISON INTERNATIONAL 8-K Report (May 10, 2002)

Filed May 10, 2002For Securities:EIX

Summary

Edison International (EIX) has filed an 8-K report on May 10, 2002, to announce a significant change in its independent auditor. The company's Board of Directors, upon the recommendation of its Audit Committee, has decided to dismiss Arthur Andersen LLP as its auditor and appoint PricewaterhouseCoopers LLP to serve as its independent public accountants for the remainder of 2002. This change in auditors is a notable event for investors as it can sometimes signal underlying issues, though Edison International explicitly states this change is not a reflection of Andersen's capabilities or quality of service. Investors should note that the company has confirmed there were no disagreements with Arthur Andersen on any accounting principles or financial disclosure matters during their tenure. This auditor change occurs during a period of increased scrutiny of accounting firms, particularly Arthur Andersen, following major corporate scandals. While the filing emphasizes a smooth transition and no disputes with the outgoing auditor, investors will likely monitor the relationship with PricewaterhouseCoopers closely. The report also clarifies that Edison International did not consult with PricewaterhouseCoopers on any accounting matters prior to this appointment. The company's financial statements for 2001 and 2000, audited by Arthur Andersen, did not contain any adverse or qualified opinions, with the exception of an explanatory paragraph in the 2001 report concerning the adoption of new accounting standards.

Key Highlights

  • 1Edison International is changing its independent registered public accounting firm.
  • 2Arthur Andersen LLP has been dismissed as Edison International's auditor.
  • 3PricewaterhouseCoopers LLP has been appointed as the new independent auditor for the remainder of 2002.
  • 4The decision to change auditors was made by the Board of Directors upon the recommendation of the Audit Committee.
  • 5The company stated that the change is not a reflection of Arthur Andersen's capabilities, commitment, or quality of service.
  • 6There were no disagreements with Arthur Andersen on any matters of accounting principles, financial statement disclosure, or auditing procedures during the past two fiscal years and up to the report date.
  • 7Arthur Andersen's audit reports for fiscal years 2000 and 2001 did not contain adverse opinions or disclaimers, with an explanatory paragraph in the 2001 report regarding new accounting standards adoption.

Frequently Asked Questions

Edison International's Board of Directors, on the recommendation of its Audit Committee, decided to change auditors. The company explicitly states that this decision is not a reflection of Arthur Andersen's capabilities, commitment, or quality of service, and that Andersen's audit teams demonstrated professionalism and quality service during their long relationship.

No, the filing explicitly states that during Edison International's two most recent fiscal years and through the report date, there were no disagreements with Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

No, the filing indicates that Edison International did not consult with PricewaterhouseCoopers LLP regarding the application of accounting principles to any transactions or other audit-related matters prior to this appointment.

Arthur Andersen's reports on Edison International's consolidated financial statements for 2000 and 2001 did not contain adverse opinions or disclaimers of opinion. The 2001 report did include an explanatory paragraph regarding the adoption of new accounting standards (SFAS No. 133 and SFAS No. 144).