8-K: Capitol Federal Financial Appoints KPMG as New Independent Auditor, Replacing Deloitte

Capitol Federal Financial has appointed KPMG as its new independent auditor, replacing Deloitte, effective after the completion of Deloitte's services for the fiscal quarter ended December 31, 2023.

Summary

• Capitol Federal Financial, Inc. has changed its independent registered public accounting firm from Deloitte & Touche LLP to KPMG LLP.
• The change was approved by the Audit Committee of the Board of Directors on January 23, 2024, following a request for proposal process.
• KPMG's appointment is for the fiscal year ending September 30, 2024, and related interim periods, subject to standard client acceptance procedures and an engagement letter.
• Deloitte's dismissal is effective upon completion of their services for the fiscal quarter ended December 31, 2023.
• There were no disagreements between Capitol Federal Financial and Deloitte on accounting principles, financial statement disclosure, or auditing scope during the two most recent fiscal years and the subsequent interim period.
• Deloitte's reports on the company's financial statements for the fiscal years ended September 30, 2023 and 2022 did not contain any adverse opinions or disclaimers.
• The company provided Deloitte with a copy of the disclosures in this report, and Deloitte has confirmed their agreement with the statements made by the company, except for paragraphs 1 and 7, where they have no basis to agree or disagree.

Sentiment

Score: 7

Explanation: The document indicates a routine change of auditors with no apparent issues, suggesting a neutral to slightly positive sentiment. The lack of disagreements with the previous auditor is a positive sign.

Positives

• The transition to a new auditor appears to be smooth, with no reported disagreements with the previous auditor, Deloitte.
• Deloitte's audit reports for the past two fiscal years were clean, with no adverse opinions or disclaimers.
• The company followed a formal request for proposal process in selecting KPMG, suggesting a thorough and considered approach.

Risks

• The transition to a new auditor could present some initial challenges as KPMG becomes familiar with the company's financial systems and controls.
• Although no disagreements were reported, any change in auditor can introduce a degree of uncertainty.

Future Outlook

The company will be working with KPMG for the fiscal year ending September 30, 2024, and related interim periods.

Industry Context

Changes in auditors are not uncommon, but they are significant events that require careful management and transparency. The selection of a new auditor is a key corporate governance decision.

Comparison to Industry Standards

• The process of changing auditors is a standard practice in the industry, often following a request for proposal process to ensure a thorough selection.
• Companies like Bank of America, JP Morgan Chase, and Wells Fargo also periodically review and change their auditors, although the specific reasons and timing vary.
• The lack of disagreements with the previous auditor, Deloitte, is a positive sign, as it indicates a smooth transition and adherence to accounting standards.

Stakeholder Impact

• Shareholders will be interested in the smooth transition to a new auditor and the continued integrity of financial reporting.
• Employees in the finance and accounting departments will need to work with the new auditor, KPMG.

Next Steps

• KPMG will complete its standard client acceptance procedures and execute an engagement letter.
• KPMG will begin its audit work for the fiscal year ending September 30, 2024.

Key Dates

Keywords

auditor, KPMG, Deloitte, accounting, audit, financial statements, Capitol Federal Financial