Item 4.01 Changes in Registrant’s Certifying Accountant
(a) Dismissal of Independent Registered Public Accounting Firm
On February 21, 2023, the Audit Committee of the Board of Directors (the “Audit Committee”) of Qualtrics International Inc. (the “Company”) approved the dismissal of KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm, upon completion of KPMG’s audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2022 and of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, and issuance of KPMG’s reports thereon.
The audit reports of KPMG on the Company’s consolidated financial statements as of and for the years ended December 31, 2022 and 2021 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. The audit report of KPMG on the effectiveness of internal control over financial reporting as of December 31, 2022 indicates that the Company did not maintain effective internal control over financial reporting as of December 31, 2022 because of the effect of a material weakness on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states a material weakness related to risk assessment over information technology general controls, including certain controls over logical access and change management, and process level controls including information used in the execution of those controls been identified and included in management’s assessment.
During the fiscal years ended December 31, 2022 and 2021, and through the date of KPMG’s dismissal on February 24, 2023, there were (i) no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of KPMG would have caused KPMG to make reference to the subject matter of the disagreement in connection with its reports on the Company’s consolidated financial statements for such years, and (ii) no “reportable events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K), except that KPMG advised the Company of the material weakness in the Company’s internal control over financial reporting previously reported in Part II, Item 9A “Controls and Procedures” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and described below.
The material weakness was related to management’s risk assessment process over information technology general controls, including certain controls over logical access and change management, and process level controls including information used in the execution of those controls that impacted our financial reporting processes.
In accordance with item 304(a)(3) of Regulation S-K, the Company has provided KPMG with a copy of this Current Report on Form 8-K and requested that KPMG provide the Company with a letter addressed to the Securities and Exchange Commission stating whether or not KPMG agrees with the above disclosure. A copy of KPMG’s letter, dated February 24, 2023, is attached as Exhibit 16.1 to this Current Report on Form 8-K.
(b) Appointment of New Independent Registered Public Accounting Firm
Under the Company’s master transaction agreement with SAP SE (“SAP”), the Company has agreed, subject to applicable law, to use the same independent certified public accountants as those selected by SAP. SAP has appointed BDO AG Wirtschaftsprüfungsgesellschaft as SAP’s independent registered public accounting firm for the fiscal year ending December 31, 2023.
On February 21, 2023, the Audit Committee appointed BDO USA, LLP (“BDO”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023, to be effective upon the execution of an engagement letter and related completion of BDO’s standard client acceptance procedures to ensure their independence.
During the two most recent fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through February 24, 2023, neither the Company nor anyone acting on its behalf has consulted with BDO 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 or the effectiveness of internal control over financial reporting, and neither a written report nor oral advice was provided to the Company that BDO 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” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K) or a “reportable event” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).