Item 4.01. Changes in Registrant's Certifying Accountant.
On March 18, 2022, the Audit Committee ("Audit Committee") of the Board of
Directors of Leonardo DRS, Inc. (the "Company") selected Ernst & Young LLP
("EY") as the Company's independent registered public accounting firm for the
Company's fiscal year ending December 31, 2022, subject to completion of EY's
standard client acceptance procedures and execution of an engagement letter. The
Company will dismiss KPMG LLP ("KPMG"), which is currently serving as the
Company's independent registered public accounting firm, upon completion of
their audit of the Company's consolidated financial statements as of and for the
year ended December 31, 2021, and the issuance of their report thereon. The
Audit Committee has selected EY in connection with the selection by the
Company's ultimate parent Leonardo S.p.A. of an affiliate of EY to serve as
independent auditors of Leonardo S.p.A. in light of European mandatory audit
firm rotation rules.
KPMG's reports on the Company's consolidated financial statements as of and for
the fiscal years ended December 31, 2019 and 2020 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 that KPMG's report on
the Company's consolidated financial statements as of and for the years ended
December 31, 2019 and 2020, which contained an unqualified opinion that the
financial statements present fairly, in all material respects, the Company's
financial position, results of operations and cash flows in conformity with U.S.
generally accepted accounting principles, included an emphasis-of-matter
paragraph stating that "As discussed in Note 1 to the consolidated financial
statements, the Company has changed its method of accounting for leases as of
January 1, 2019 in accordance with the adoption of Accounting Standard
Codification (ASC) Topic 842, Leases."
During the fiscal years ended December 31, 2019 and 2020, and the subsequent
interim periods through March 18, 2022, there were: (i) no disagreements within
the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions
between the Company and KPMG on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure which,
if not resolved to KPMG's satisfaction, would have caused KPMG to make reference
thereto in their reports? or (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. A copy of KPMG's letter, dated March 23, 2022, is filed as Exhibit
16.1 to this Form 8-K.
During the fiscal years ended December 31, 2019 and 2020 and the subsequent
interim periods through March 18, 2022, 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.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit Number Description
16.1 Letter from KPMG LLP
104 Cover Page Interactive Data File (formatted as Inline XBRL)
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