Item 4.01 Changes in Registrant's Certifying Accountant
(a) On April 2, 2020, Severn Bancorp, Inc. (the "Company") dismissed BDO USA,
LLP ("BDO") as the Company's principal accountants. This decision was approved
by the Company's Audit and Examining Committee.
The audit reports of BDO on the Company's consolidated financial statements as
of and for the years ended December 31, 2019 and 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 that BDO issued an
adverse audit report on the effectiveness of the Company's internal control over
financial reporting in its Report of Independent Registered Public Accounting
Firm as of December 31, 2018 due to material weaknesses in the Company's
internal control over financial reporting as of December 31, 2018 as disclosed
in the Company's Annual Report on Form 10-K for the year ended December 31, 2018
filed with the Securities and Exchange Commission (the "SEC") on April 18, 2019.
During the years ended December 31, 2019 and 2018 and the subsequent interim
period through April 2, 2020, there were no: (1) disagreements with BDO on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure which disagreements, if not resolved to the
satisfaction of BDO, would have caused BDO to make reference to the subject
matter of the disagreements in connection with its audit reports, or (2)
reportable events under Item 304(a)(1)(v) of SEC Regulation S-K.
The Company has provided BDO with a copy of the disclosure contained in this
Current Report on Form 8-K prior to filing with the SEC. The Company has
requested that BDO issue a letter stating whether or not it agrees with the
above statements. The letter from BDO to the SEC is attached as Exhibit 16 to
this Current Report on Form 8-K.
(b) On April 2, 2020, the Audit and Examining Committeeof the Company engaged
Yount, Hyde & Barbour, P.C. ("YHB") as the Company's new principal accountants
for the year ending December 31, 2020. During the years ended December 31, 2019
and 2018 and the subsequent interim period prior to engaging YHB, the Company
did not consult with YHB regarding (i) the application of accounting principles
to a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's financial statements, and
neither a written report nor oral advice was provided to the Company
that YHB 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 either the subject of a disagreement or a reportable event,
each as defined in Regulation S-K Item 304(a)(1)(v), respectively.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Shell Company Transactions. Not applicable.
Exhibit No. Description
16 Letter of BDO USA, LLP
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