8-K/A: Funko Appoints PricewaterhouseCoopers as New Independent Auditor, Replacing Ernst & Young

Funko, Inc. has changed its independent auditor from Ernst & Young LLP to PricewaterhouseCoopers LLP, effective after the filing of their Q1 2024 report.

Summary

• Funko, Inc. has appointed PricewaterhouseCoopers LLP (PwC) as their new independent registered public accounting firm for the fiscal year ending December 31, 2024.
• This change was approved by the Audit Committee on April 11, 2024, following a competitive process.
• The engagement of PwC became effective after the company filed its quarterly report on Form 10-Q for the quarter ended March 31, 2024, on May 9, 2024.
• Ernst & Young LLP (EY) was dismissed as the company's independent auditor on the same date.
• EY's reports for the fiscal years ended December 31, 2022 and 2023 did not contain any adverse opinions, disclaimers, or qualifications.
• There were no disagreements between Funko and EY on accounting principles, financial statement disclosure, or auditing scope.
• There were no reportable events other than those previously disclosed.
• Funko did not consult with PwC on accounting principles or audit opinions prior to their engagement.

Sentiment

Score: 7

Explanation: The document indicates a routine change of auditors with no apparent issues, suggesting a neutral to slightly positive sentiment. The process was orderly and transparent.

Positives

• The transition to a new auditor was conducted through a competitive process, suggesting a focus on best practices.
• EY's audit reports for the past two fiscal years were clean, indicating no major accounting or auditing issues.
• There were no disagreements between Funko and EY, suggesting a smooth working relationship.

Risks

• The change in auditors could potentially introduce a period of adjustment and learning for both Funko and PwC.
• While no issues were reported, any change in auditors can sometimes reveal previously unnoticed issues.

Industry Context

The change of auditors is a common practice for public companies, often done to ensure independence and fresh perspectives on financial reporting. It is not unusual for companies to conduct competitive processes to select their auditors.

Comparison to Industry Standards

• Switching auditors is a normal practice in the corporate world, with companies like Nike, Coca-Cola, and Apple having changed auditors in the past.
• The process Funko followed, a competitive bid, is standard practice to ensure the best fit and value.
• The lack of disagreements with the previous auditor, EY, is a positive sign, as it indicates no underlying issues that would cause concern.

Stakeholder Impact

• The change of auditors is unlikely to have a significant impact on stakeholders, as it is a routine corporate governance matter.
• Shareholders may view the competitive process as a positive sign of management's commitment to best practices.

Key Dates

Keywords

auditor, PricewaterhouseCoopers, Ernst & Young, accounting, audit, financial reporting, Funko