8-K: DarioHealth Corp. Changes Independent Auditor from EY to PwC

DarioHealth Corp. has replaced Ernst & Young (EY) with PricewaterhouseCoopers (PwC) as its independent registered public accounting firm, effective March 12, 2025.

Summary

• DarioHealth Corp.'s Audit Committee approved the engagement of Kesselman & Kesselman, a member of PricewaterhouseCoopers International Limited (PwC), as the company's new independent registered public accounting firm on March 12, 2025.
• At the same time, Kost, Forer, Gabbay & Kasierer, a Member of Ernst & Young Global (EY), was dismissed from this role.
• The audit reports from EY for the fiscal years ending December 31, 2024 and 2023, had no adverse opinions, disclaimers, or qualifications regarding uncertainty, audit scope, or accounting principles.
• During the relevant periods, there were no disagreements between DarioHealth and EY on accounting principles, financial statement disclosure, or auditing scope that would have caused EY to reference the disagreement in their reports.
• Similarly, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
• DarioHealth consulted with PwC on accounting matters, including valuation of financial instruments, incremental borrowing rates for operating leases, and goodwill impairment tests.
• These consultations did not involve the type of audit opinion or any matter that was the subject of a disagreement or reportable event.
• EY has reviewed the company's disclosures regarding this change and agrees with the statements made in the Form 8-K.

Sentiment

Score: 7

Explanation: The announcement is neutral to slightly positive. The change in auditors appears to be a routine matter with no indication of underlying issues. The engagement of PwC could be viewed positively as a sign of commitment to strong financial controls.

Positives

• The transition to a new auditor appears smooth, with no reported disagreements or issues with the previous auditor, EY.
• EY's audit reports for the past two fiscal years were unqualified, indicating sound financial reporting.

Industry Context

Changing auditors is a common practice for public companies, often driven by factors such as cost, expertise, or regulatory requirements. The selection of a Big Four firm like PwC suggests a commitment to maintaining high standards of financial reporting.

Comparison to Industry Standards

• The engagement of a 'Big Four' accounting firm like PwC is a common practice among publicly traded companies to ensure credibility and compliance with regulatory standards.
• Companies like Teladoc Health and Livongo (prior to its merger with Teladoc) have also utilized Big Four firms for their auditing needs.
• The absence of disagreements with the previous auditor, EY, aligns with industry best practices for a smooth auditor transition.

Stakeholder Impact

• Shareholders may view the change in auditors as a routine matter, provided there are no underlying concerns about financial reporting.
• Employees in the finance and accounting departments will need to adapt to the new auditor's processes and requirements.

Key Dates

Keywords

auditor, PwC, EY, DarioHealth, accounting firm, independent registered public accounting firm, audit committee