8-KFinancial Events

MERCADOLIBRE INC 8-K Report, Auditor Change (Nov 8, 2021)

Filed November 8, 2021For Securities:MELI

Summary

MercadoLibre, Inc. (MELI) filed an 8-K on November 8, 2021, to announce a change in its independent registered public accounting firm. Effective after the completion of its 2021 audit and report issuance, the company will dismiss Deloitte & Co S.A. as its auditor. This decision was made at the direction of the Audit Committee. Concurrently, the company has appointed Pistrelli, Henry Martin y Asociados S.R.L., a member firm of Ernst & Young Global Limited (EY), as its new independent registered public accounting firm. EY's appointment is contingent upon client acceptance procedures and will be for the fiscal year ending December 31, 2022, and related interim periods. The filing clarifies that there were no disagreements with Deloitte regarding accounting principles or financial disclosures, although it references previously disclosed material weaknesses in internal control over financial reporting.

Key Highlights

  • 1MercadoLibre, Inc. is changing its independent registered public accounting firm, dismissing Deloitte & Co S.A.
  • 2The dismissal of Deloitte is effective upon the completion of their audit for the fiscal year ending December 31, 2021.
  • 3Ernst & Young (EY) has been appointed as the new independent registered public accounting firm.
  • 4EY's appointment is for the fiscal year ending December 31, 2022, and subsequent interim periods.
  • 5The company states there were no disagreements with Deloitte on accounting principles or financial reporting matters.
  • 6Previously disclosed material weaknesses in internal control over financial reporting are referenced in the context of auditor change disclosures.
  • 7Deloitte has provided a letter to the SEC agreeing with the company's statements regarding the auditor change.

Frequently Asked Questions

The 8-K filing indicates that the decision to dismiss Deloitte was made at the direction of the Audit Committee. While the specific reasons beyond this are not detailed, such changes are common in corporate governance and can be for various strategic or cyclical reasons.

According to the filing, Deloitte's reports for fiscal years 2019 and 2020 did not contain any adverse opinions or disclaimers of opinion. Furthermore, there were no disagreements with Deloitte on accounting principles or financial statement disclosures. However, the filing does reference previously disclosed material weaknesses in internal control over financial reporting.

EY's appointment is for the fiscal year ending December 31, 2022, and related interim periods. Their official engagement is contingent upon the completion of client acceptance procedures.

Material weaknesses in internal control over financial reporting are identified deficiencies that could result in a misstatement of the financial statements. While this filing notes that these were previously disclosed by the company, it's an important disclosure for investors to be aware of regarding the company's financial reporting infrastructure.