8-K/AFinancial EventsExhibits & Filings

NETFLIX INC 8-K/A Report, Auditor Change (Apr 10, 2012)

Filed April 10, 2012For Securities:NFLX

Summary

This 8-K Amendment filing from Netflix, Inc. (NFLX) on April 10, 2012, primarily serves to provide an update on the company's independent registered public accounting firm. The key event reported is the change in auditor, with Netflix's Audit Committee formally engaging Ernst & Young LLP (Ernst & Young) as its independent auditor for the fiscal year ending December 31, 2012, and dismissing KPMG LLP (KPMG) from this role. The filing clarifies that this decision followed a competitive process to review the company's auditing services. Importantly, the report states that there were no disagreements or reportable events with KPMG concerning accounting principles, financial statement disclosures, or auditing procedures during the relevant periods. This is a crucial detail for investors as it suggests a smooth transition and no underlying financial statement issues flagged by the outgoing auditor. The amendment specifically includes the date on KPMG's letter, ensuring full compliance with disclosure requirements.

Key Highlights

  • 1Netflix Inc. has appointed Ernst & Young LLP (Ernst & Young) as its independent registered public accounting firm for the fiscal year ending December 31, 2012.
  • 2KPMG LLP (KPMG) has been dismissed as Netflix's independent registered public accounting firm.
  • 3The change in auditors was made by the Audit Committee of the Board of Directors following a competitive review process.
  • 4There were no "disagreements" or "reportable events" with KPMG on any accounting principles, financial statement disclosures, or auditing scope/procedures.
  • 5The transition to Ernst & Young does not involve any previously unresolved issues or consultations on significant accounting matters with the new auditor.
  • 6This filing is an amendment to a previous 8-K, primarily to include the date on KPMG's confirmatory letter.
  • 7The dismissal and appointment of auditors are standard corporate governance procedures, but the absence of disagreements with the prior auditor is a positive signal.

Frequently Asked Questions

Netflix's Audit Committee completed a competitive process to review the company's independent registered public accounting firm. As a result of this process, they decided to engage Ernst & Young LLP for the fiscal year ending December 31, 2012, and dismissed KPMG LLP.

No, the filing explicitly states that during the fiscal years ended December 31, 2011 and 2010, and the subsequent interim period through March 21, 2012, there were no 'disagreements' or 'reportable events' as defined by SEC regulations concerning accounting principles, financial statement disclosures, or auditing procedures.

For investors, the key takeaway is that the change in auditors appears to be a routine process driven by a competitive review, rather than a result of any significant issues with Netflix's financial reporting or internal controls, as indicated by the lack of disagreements with the outgoing auditor, KPMG.

This specific filing (8-K/A) is an amendment to an earlier report and primarily concerns the change of auditors. It does not introduce new financial statements or discuss specific accounting policies or revisions. The focus is on the auditor transition itself, confirming a clean break with the previous auditor.