8-KOther Events

WASTE MANAGEMENT INC 8-K Report (Mar 27, 2002)

Filed March 27, 2002For Securities:WM

Summary

Waste Management, Inc. (WM) announced a significant change in its auditing firm on March 21, 2002. The company has dismissed Arthur Andersen LLP and appointed Ernst & Young LLP as its new independent auditors. This decision was made following a review of proposals from accounting firms and was approved by the Board of Directors upon the Audit Committee's recommendation. While Arthur Andersen's reports for fiscal years 2001 and 2000 did not contain any adverse opinions or qualifications, the filing details past concerns raised by Arthur Andersen regarding WM's internal controls over accounting and financial reporting, particularly in 1999. These concerns related to the adequacy of internal controls for interim financial data reviews and the preparation of the 1999 financial statements. However, Arthur Andersen had reported in November 2000 that all previously identified material weaknesses in internal controls had been mitigated. The company states there were no unresolved disagreements with Arthur Andersen on accounting matters that would have led to a reference in their audit reports.

Key Highlights

  • 1Change of Independent Auditor: Waste Management, Inc. dismissed Arthur Andersen LLP and appointed Ernst & Young LLP as its new independent auditors as of March 21, 2002.
  • 2No Disagreements with Prior Auditor: The company reported no disagreements with Arthur Andersen on any matters of accounting principle, financial statement disclosure, or auditing procedures during the relevant periods.
  • 3Past Internal Control Concerns: Arthur Andersen had previously identified and communicated material weaknesses in WM's internal controls over accounting and financial reporting in 1999.
  • 4Mitigation of Control Weaknesses: Arthur Andersen reported in November 2000 that all previously identified material weaknesses in internal controls had been mitigated.
  • 5No Consultation with New Auditor: Waste Management, Inc. did not consult with Ernst & Young regarding accounting principles or audit opinions prior to their appointment.
  • 6Filing Includes Exhibits: The 8-K filing includes a letter from Arthur Andersen LLP regarding the change in auditor and a press release dated March 22, 2002.

Frequently Asked Questions

Waste Management, Inc. determined to appoint Ernst & Young LLP as its new independent auditors after seeking proposals from independent accounting firms. This decision followed a review process and was approved by the company's Board of Directors based on the recommendation of its Audit Committee.

No, the company stated that there were no disagreements with Arthur Andersen on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure during the relevant periods that would have caused Arthur Andersen to reference such issues in their reports.

Yes, Arthur Andersen had previously communicated concerns about material weaknesses in Waste Management's internal controls over accounting and financial reporting in 1999. However, by November 2000, Arthur Andersen reported that these weaknesses had been mitigated.

The dismissal of Arthur Andersen LLP and the appointment of Ernst & Young LLP as the new independent auditors were effective on March 21, 2002.