Item 4.01 | Change in Registrant’s Certifying Accountant. |
The Audit Committee (the “Audit Committee”) of the Board of Directors of AMC Entertainment Holdings, Inc. (the “Company”) conducted a competitive process to determine the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2020. The Audit Committee invited several firms to participate in this process, including KPMG LLP (“KPMG”), the Company’s current independent registered public accounting firm.
| (a) | Dismissal of Independent Registered Public Accounting Firm |
On November 15, 2019, the Audit Committee dismissed KPMG, which is currently serving as the Company’s independent register public accounting firm, effective upon completion of their audit of the Company’s consolidated financial statements as of and for the year ending December 31, 2019, and the issuance of their reports thereon.
KPMG’s audit reports on the Company’s consolidated financial statements as of and for the years ended December 31, 2018 and 2017 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except as follows:
KPMG’s report on the consolidated financial statements of the Company as of and for the years ended December 31, 2018 and 2017, contained a separate paragraph stating that “As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for the recognition of revenue and certain costs in the 2018 consolidated financial statements due to the adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers.”
During the years ended December 31, 2018 and 2017, and the subsequent interim periods through November 15, 2019 there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K between the Company and KPMG on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference to the subject matter of the disagreements in connection with its reports on the Company’s consolidated financial statements for such years; and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
The Company has requested that KPMG furnish a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the above statements made herein and, if not, stating the respects in which it does not agree. A copy of KPMG’s letter, dated November 19, 2019, is filed as Exhibit 16.1 to this Form 8-K.
(b)Appointment of New Independent Registered Public Accounting Firm
On November 14, 2019, the Audit Committee approved the engagement of Ernst & Young LLP (“EY”) as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2020, subject to completion of EY’s standard client acceptance procedures and execution of an engagement letter.
During the fiscal years ended December 31, 2018 and 2017 and the subsequent interim periods through November 14, 2019, neither the Company nor anyone on its behalf has consulted with EY regarding: (i) the application of accounting principles to a specific 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 EY concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.
