8-K: Victory Capital Holdings Announces Auditor Change: Deloitte Replaces Ernst & Young

Victory Capital Holdings has appointed Deloitte & Touche LLP as its new independent registered public accounting firm, replacing Ernst & Young LLP, due to auditor independence implications arising from a transaction with Amundi Asset Management S.A.S.

Summary

• Victory Capital Holdings, Inc. has changed its independent registered public accounting firm from Ernst & Young LLP (EY) to Deloitte & Touche LLP (Deloitte).
• The change is effective for the fiscal year ending December 31, 2025.
• The decision was made by the Audit Committee of the Company's Board of Directors on March 4, 2025.
• The change in auditors is due to specific auditor independence implications under SEC rules related to transactions contemplated by the Contribution Agreement between Victory Capital and Amundi Asset Management S.A.S.
• EY's reports on the company's consolidated financial statements for the fiscal years ended December 31, 2024 and 2023, did not contain any adverse opinions, disclaimers, qualifications, or modifications.
• There were no disagreements or reportable events between the Company and EY during the fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through March 4, 2025.
• The Company did not consult with Deloitte regarding accounting principles or audit opinions prior to the appointment.

Sentiment

Score: 7

Explanation: The announcement is neutral to slightly positive. It addresses a necessary change in auditors due to a corporate transaction, and the company appears to be handling the transition smoothly. The lack of disagreements with the previous auditor is reassuring.

Positives

• The auditor change was preemptive and not due to any issues with EY's work or the Company's financial statements.
• EY's reports for the past two fiscal years were clean, indicating sound financial reporting practices.
• The company is proactively addressing potential auditor independence issues.

Future Outlook

The company will be working with Deloitte & Touche LLP for its fiscal year ending December 31, 2025.

Industry Context

Auditor changes are not uncommon, especially following significant corporate transactions. Companies must ensure auditor independence to comply with SEC regulations. This change reflects Victory Capital's proactive approach to maintaining compliance.

Comparison to Industry Standards

• Auditor selection processes typically involve a thorough review of several firms, considering factors like industry expertise, global reach, and fees.
• Companies like BlackRock, State Street, and Franklin Resources also use large, reputable firms such as Deloitte, EY, PwC, and KPMG for their auditing needs.
• The transition process usually involves close coordination between the outgoing and incoming auditors to ensure a smooth handover of responsibilities and documentation.

Stakeholder Impact

• Shareholders may be interested in the change of auditors, but the announcement indicates a smooth transition and no concerns about past financial statements.
• Employees in the finance and accounting departments will be involved in the transition to the new auditor.

Key Dates