8-K: Live Oak Bancshares Appoints KPMG as New Independent Auditor, Replacing Forvis Mazars

Live Oak Bancshares has appointed KPMG as its new independent auditor, replacing Forvis Mazars, effective August 6, 2024.

Summary

• Live Oak Bancshares has changed its independent registered public accounting firm from Forvis Mazars, LLP to KPMG LLP.
• The change was approved by the Audit Committee on August 6, 2024, following a competitive proposal process.
• KPMG's appointment is subject to completion of their standard client acceptance procedures and execution of an engagement letter.
• Forvis Mazars, LLP audited the company's consolidated financial statements for 2023 and was dismissed on August 6, 2024.
• There were no disagreements or reportable events between Live Oak Bancshares and Forvis Mazars, LLP during the audits for 2022 and 2023.
• Forvis Mazars' audit reports for 2022 and 2023 did not contain any adverse opinions, disclaimers, or qualifications.

Sentiment

Score: 7

Explanation: The document reflects a routine change of auditors with no indication of any underlying issues. The process appears to have been handled professionally and transparently.

Positives

• The transition to a new auditor was conducted smoothly with no reported disagreements or issues with the previous auditor.
• The Audit Committee conducted a competitive proposal process to select the new auditor, suggesting a thorough and diligent approach.
• The previous auditor, Forvis Mazars, confirmed their agreement with the statements made by Live Oak Bancshares regarding their dismissal.

Risks

• The transition to a new auditor could introduce some short-term operational risks as KPMG familiarizes itself with the company's financials.
• There is a risk of potential delays in the audit process during the transition period.

Industry Context

The change of auditors is a common occurrence in the financial industry, often driven by factors such as rotation policies, cost considerations, or the desire for a fresh perspective. The selection of KPMG, a large international firm, suggests a move towards a more established and well-known auditor.

Comparison to Industry Standards

• Switching auditors is a normal practice in the financial industry, with companies often rotating auditors every few years to ensure independence and objectivity.
• Many large financial institutions use the 'Big Four' accounting firms (Deloitte, Ernst & Young, KPMG, and PwC) for their audits, so the appointment of KPMG is in line with industry standards.
• The lack of disagreements or reportable events with the previous auditor is a positive sign, indicating a healthy relationship and adherence to accounting standards.

Stakeholder Impact

• The change of auditors is unlikely to have a significant impact on shareholders, employees, customers, or suppliers.
• The smooth transition and lack of issues with the previous auditor should reassure stakeholders.

Key Dates

Keywords

auditor, KPMG, Forvis Mazars, accounting firm, audit committee, financial statements, independent auditor