Item 4.01. Changes in Registrant's Certifying Accountant
(a) Dismissal of Former Independent Registered Public Accounting Firm
The Audit Committee of the Board of Directors of The Estée Lauder Companies Inc.
(the "Company") conducted a competitive process to determine the Company's
independent registered public accounting firm for the fiscal year ending June
30, 2021 (fiscal 2021). Several firms were invited to participate in this
process including KPMG LLP ("KPMG"), which has served as the Company's
independent registered public accounting firm since 2002.
As a result of this process, following the review and evaluation of the
proposals from the participating firms, on February 21, 2020, the Audit
Committee approved the dismissal of KPMG as the Company's independent registered
public accounting firm; this dismissal will be effective upon the completion of
KPMG's audits and the issuance of its reports on the Company's consolidated
financial statements and the effectiveness of internal control over financial
reporting for the Company's fiscal year ended June 30, 2020 (fiscal 2020) to be
included in the Company's Form 10-K for fiscal 2020.
KPMG's audit reports on the Company's consolidated financial statements as of
and for the fiscal years ended June 30, 2019 (fiscal 2019) and June 30, 2018
(fiscal 2018) did not contain any adverse opinion or a disclaimer of opinion,
and were not qualified or modified as to uncertainty, audit scope or accounting
principles, except that KPMG's fiscal 2019 audit report contained an explanatory
paragraph stating that "As discussed in Note 13 to the consolidated financial
statements, the Company has changed its method of accounting for revenue and
related costs effective July 1, 2018 due to the adoption of Accounting Standards
Codification Topic 606, Revenue from Contracts with Customers."
KPMG's audit reports on the effectiveness of internal control over financial
reporting as of June 30, 2019 and 2018 did not contain any adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles.
During the fiscal years ended June 30, 2019 and June 30, 2018, and in the
subsequent interim period through February 21, 2020, (i) there were no
disagreements with KPMG (within the meaning of Item 304(a)(1)(iv) of Regulation
S-K ("Regulation S-K") of the rules and regulations of the U.S. Securities and
Exchange Commission (the "SEC")) on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure that
if not resolved to KPMG's satisfaction, would have caused KPMG to make reference
thereto in its reports; and (ii) there were no reportable events (as defined by
Item 304(a)(1)(v) of Regulation S-K).
The Company provided KPMG with a copy of the foregoing disclosures and requested
that KPMG provide a letter addressed to the SEC stating whether it agrees with
such disclosures. A copy of KPMG's letter dated February 26, 2020 is filed as
Exhibit 16.1 to this Form 8-K.
(b) Appointment of New Independent Registered Public Accounting Firm
As a result of the competitive process noted above, on February 21, 2020, the
Audit Committee appointed PricewaterhouseCoopers LLP ("PwC") as the Company's
new independent registered public accounting firm, contingent upon the execution
of an engagement letter following completion of PwC's client acceptance
procedures. PwC's appointment will be for the Company's fiscal year ending June
30, 2021 (fiscal 2021) and related interim periods.
During the Company's two most recent fiscal years ended June 30, 2019 and June
30, 2018, and for the subsequent interim period through February 21, 2020,
neither the Company nor anyone on its behalf consulted PwC regarding any of the
matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
16.1 Letter of KPMG LLP, dated February 26, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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