September 21, 2019

Auditor Swap: Fitbit Dumps PwC In Favor of Grant Thornton

The Purple Rose of Chicago just got itself a new engagement.

Via Reuters:

Wearable device maker Fitbit Inc has dismissed auditor PricewaterhouseCoopers LLP after a review of its fees and appointed Grant Thornton LLP, the company said in a regulatory filing on Thursday.

The filing states that Fitbit chose not to renew its engagement with PwC on March 8 and let P. Dubs know it was going in a different direction on March 9. The decision to change audit firms was approved by Fitbit’s audit committee. PwC was the company’s auditor for the past two fiscal years (Dec. 31, 2017, and Dec. 31, 2018).

The audit committee approved the appointment of Grant Thornton as Fitbit’s new external auditor on March 8.

As is typically the case in 8-Ks when there’s an auditor swap, Fitbit said there were no disagreements with PwC “on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.”

However, the company did disclose this little tidbit in its filing:

Also during this same period, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto, except for the material weakness in the Company’s internal control over financial reporting related to the accuracy of the inputs in the sales order entry process, previously reported in Item 9A of the Company’s Annual Report on Form 10-K for the fiscal years ended December 31, 2018 and December 31, 2017, which has not yet been fully remediated.

Losing Fitbit as an audit client is probably just a blip on the radar for PwC, but losing the engagement to Grant Thornton has to sting a little.

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