Item 4.01 – Change in Registrant’s Certifying Accountant.
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(a)
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Dismissal of Independent Registered Accounting Firm
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On May 17, 2019, the Audit Committee of the Board of Directors (the “
Audit Committee
”) of AZZ Inc. (the “
Company
”) dismissed BDO USA, LLP (“
BDO
”) as the Company’s independent registered public accounting firm and provided BDO with notice of such dismissal.
During the fiscal years ended February 28, 2018 and 2019, there were no (i) “disagreements” (as such term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) with BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of BDO would have caused them to make reference thereto in their reports on the financial statements for such periods; or (ii) “reportable events” (as such term is defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto), except that as reported in Part II, Item 9A of the Company’s Annual Reports on Form 10-K for the fiscal year ended February 28, 2018 (the “
2018 10-K
”) and for the fiscal year ended February 28, 2019 (the “
2019 10-K
”), the Company reported a material weakness in its internal control over financial reporting. In particular, as of February 28, 2018, the Company concluded its internal control over financial reporting was not effective due to the inadequate design of controls pertaining to the Company’s review and ongoing monitoring of its revenue recognition policies. As of February 28, 2019, the Company concluded that its internal control over financial reporting was not effective as of February 28, 2019 due to the existence of a material weakness related to inadequate operating effectiveness of controls pertaining to the Company’s preparation and review of its revenue reconciliations. BDO’s reports on the effectiveness of the Company’s internal control over financial reporting as of February 28, 2018 and as of February 28, 2019, which were included in the 2018 10-K and 2019 10-K, respectively, contained adverse opinions therein.
On May 17, 2019, the Company provided BDO with its disclosures in this Current Report on Form 8-K disclosing the dismissal of BDO and requested in writing that BDO furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether they agree with such disclosure. A copy of BDO’s response is filed as Exhibit 16.1 to this Current Report on Form 8-K.
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(b)
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Engagement of Independent Registered Accounting Firm
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On May 17, 2019 the Audit Committee approved the engagement of Grant Thornton LLP (“
GT
”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending February 29, 2020. During the Company’s two most recent fiscal years ended February 28, 2018 and 2019, the Company engaged with GT on the following matters:
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(i)
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Accounting advisory services related to the Company’s adoption of new accounting standards for revenue recognition and leasing; and
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(ii)
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Tax advisory services related to tax compliance and optimization.
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During the Company’s two most recent fiscal years ended February 28, 2018 and 2019, other than the matters described above, neither the Company nor anyone acting on its behalf consulted with GT on (i) any matters regarding the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the Company’s consolidated financial statements, and no written report or oral advice was provided to the Company that GT concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was the subject of any “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto). The Company has authorized BDO to respond fully and without limitation to all requests of GT concerning the material weaknesses referenced above.