Item 4.01 Changes in Registrant's Certifying Accountant.
(a) Dismissal of Previous Independent Registered Public Accounting Firm.
The Audit Committee (the "Audit Committee") of the Board of Directors of Cadence
Design Systems, Inc. ("Cadence" or the "Company") conducted a competitive
process to determine Cadence's independent registered public accounting firm for
the fiscal year ending January 2, 2021. The Audit Committee invited several
independent registered public accounting firms to participate in the process.
Following review of proposals from the independent registered public accounting
firms that participated in this process, the Audit Committee on February 26,
2020 dismissed KPMG LLP ("KPMG") as Cadence's independent registered public
accounting firm, effective as of that date.
KPMG's audit reports on Cadence's consolidated financial statements for each of
the two most recent fiscal years ended December 28, 2019 and December 29, 2018
did not contain an adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles,
except as follows:
KPMG's reports on the consolidated financial statements of Cadence as of and for
the years ended December 28, 2019 and December 29, 2018, contained a separate
paragraph stating that "As discussed in Note 2 to the consolidated financial
statements, the Company changed its method of accounting for leases as of
December 30, 2018, due to the adoption of Financial Accounting Standards Board
(FASB) Accounting Standards Update (ASU) 2016-02, Leases, and changed its method
of accounting for revenue recognition as of December 31, 2017, due to the
adoption of FASB ASU 2014-09, Revenue from Contracts with Customers."
During Cadence's two most recent fiscal years ended December 28, 2019 and
December 29, 2018 and during the subsequent interim period through February 26,
2020, there were (i) no disagreements with KPMG on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures, which if not resolved to KPMG's satisfaction, would have caused KPMG
to make reference to the subject matter of the disagreements in its reports on
Cadence's consolidated financial statements for such years, and (ii) no
"reportable events" as defined in Item 304(a)(1)(v) of Regulation S-K.
Cadence provided KPMG with a copy of the disclosures in this Current Report on
Form 8-K (this "Report") prior to filing this Report with the Securities and
Exchange Commission (the "SEC"). Cadence has requested that KPMG furnish a
letter addressed to the SEC stating whether or not KPMG agrees with the
statements above. A copy of KPMG's letter dated March 3, 2020 is filed as
Exhibit 16.01 to this Report.
(b) Appointment of New Independent Registered Public Accounting Firm.
The Audit Committee, on and effective as of February 26, 2020, appointed
PricewaterhouseCoopers LLP ("PwC") as Cadence's independent registered public
accounting firm for Cadence's fiscal year ended January 2, 2021.
During Cadence's two most recent fiscal years ended December 28, 2019 and
December 29, 2018 and during the subsequent interim period through February 26,
2020, neither Cadence nor anyone acting on its behalf has consulted with PwC,
regarding either: (i) the application of accounting principles to a specific
transaction, completed or proposed, or the type of audit opinion that might be
rendered on Cadence's consolidated financial statements, and neither a written
report nor oral advice was provided to Cadence that PwC concluded was an
important factor considered by Cadence in reaching a decision as to any
accounting, auditing, or financial reporting issue, or (ii) any matter that was
either the subject of a "disagreement" (as defined in Item 304(a)(1)(iv) of
Regulation S-K) or a "reportable event" (as described in Item 304(a)(1)(v) of
Regulation S-K).
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
16.01 Letter from KPMG LLP dated March 3, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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