Item 4.01 Changes in Registrant's Certifying Accountant.
Notice of Dismissal of Current Independent Registered Public Accounting Firm and
Engagement of New Independent Registered Public Accounting Firm For Fiscal 2020
The Audit Committee (the "Audit Committee") of the Board of Directors of
Gentherm Incorporated (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.
Following a review of the proposals received, the Audit Committee: (i) on
January 31, 2020, engaged Ernst & Young LLP ("EY") to serve as the Company's
independent registered public accounting firm for the Company's fiscal year
ending December 31, 2020, and (ii) on January 27, 2020, notified Grant Thornton
LLP ("GT"), the Company's current independent registered public accounting firm,
that the Audit Committee had determined to dismiss GT as the Company's
independent registered public accounting firm, effective as of the close of
business on the date the Company publicly files its audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2019.
Reports of Current Independent Registered Public Accounting Firm During
Applicable Period
GT's reports on the Company's consolidated financial statements as of and for
the fiscal 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. GT's report on the
Company's internal control over financial reporting as of December 31,
2018 contained an adverse opinion because of the effect of the material weakness
described in the following paragraph. GT's report on the Company's internal
control over financial reporting as of December 31, 2017 did not contain any
adverse opinion or disclaimer of opinion, nor was it qualified or modified as to
uncertainty, audit scope, or accounting principles. During the fiscal years
ended December 31, 2018 and 2017 and the subsequent interim periods through
January 27, 2020, there were no disagreements (within the meaning of Item
304(a)(1)(iv) of Regulation S-K and the related instructions) between the
Company and GT on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to
GT's satisfaction, would have caused GT to make reference thereto in its
reports.
No "Reportable Events" Occurred During Applicable Period, Except For Prior
Material Weakness That Has Been Remediated
During the fiscal years ended December 31, 2018 and 2017 and the subsequent
interim periods through January 27, 2020, except for the material weakness in
internal control over financial reporting described below, there were no
"reportable events" within the meaning of Item 304(a)(1)(v) of Regulation S-K.
As disclosed in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2018, the Company identified a material weakness related to
Information Technology General Controls at its wholly owned subsidiary, Gentherm
Medical, LLC (formerly, Cincinnati Sub-Zero Products, LLC), which did not
operate in a way to appropriately restrict elevated access and address
segregation of duty conflicts at both the information technology and end user
levels. In view of this material weakness, GT's report on the effectiveness of
the Company's internal control over financial reporting as of December 31, 2018
indicated that the Company did not maintain effective internal control over
financial reporting as of December 31, 2018. The Company implemented a
remediation plan that included development of enhanced risk assessment
procedures and controls over the monitoring of elevated access and segregations
of duty conflicts. The Company completed testing of the operating effectiveness
of the enhanced controls and found them to be effective as of September 30, 2019
and, therefore, concluded that the material weakness was remediated as of
September 30, 2019. The subject matter of this material weakness was discussed
by the Audit Committee with GT. The Company has authorized GT to respond fully
to the inquiries of EY concerning the prior material weakness.
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No Reportable Consultations With New Independent Registered Public Accounting
Firm
During the fiscal years ended December 31, 2018 and 2017 and the subsequent
interim periods through January 31, 2020, 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).
Other Matters
The Company requested that GT furnish a letter addressed to the Securities and
Exchange Commission stating whether or not it agrees with the above statements.
GT has furnished the letter confirming its agreement with the above statements.
A copy of GT's letter, dated January 31, 2020, is filed as Exhibit 16 to this
Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
16 Letter from Grant Thornton LLP
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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