Item 4.01 Changes in Registrant's Certifying Accountant.
(a) Dismissal of Previous Independent Registered Public Accounting Firm
On April 29, 2020 the Audit Committee (the "Audit Committee") of the Board of Directors of Smartsheet Inc. (the "Company") dismissed PricewaterhouseCoopers LLP ("PwC") as the Company's independent registered public accounting firm, effective immediately.
The reports of PwC on the consolidated financial statements of the Company and its subsidiaries as of and for the fiscal years ended January 31, 2020 and 2019 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.
During the fiscal years ended January 31, 2020 and 2019 and during the interim period through April 29, 2020 there were (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K between the Company and PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which, if not resolved to PwC's satisfaction, would have caused PwC to make reference thereto in their reports, and (ii) no "reportable events" within the meaning of Item 304(a)(1)(v) of Regulation S-K, except for:
a.For the fiscal year ended January 31, 2020 – the material weaknesses in the Company's internal controls over financial reporting previously reported in Item 9A of the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2020 filed on March 31, 2020 which related to an ineffective control environment resulting from insufficient resources with appropriate level of controls knowledge and expertise commensurate with our financial reporting requirements and which contributed to additional material weaknesses in that the Company did not design and maintain effective (1) information technology general controls for program change management, user access, and computer operations, and (2) controls relating to order entry and pricing during our billing and revenue process.
b.For the fiscal year ended January 31, 2019 – the material weakness in the Company's internal controls over financial reporting previously reported in Item 9A of the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2019 filed on April 1, 2019 which related to a lack of qualified accounting and financial reporting personnel with an appropriate level of experience.
The Company provided PwC with a copy of the disclosures it is making in this Current Report on Form 8-K and requested that PwC furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made herein and, if not, stating the respects in which it does not agree. A copy of such letter provided by PwC, dated April 30, 2020, is filed as Exhibit 16.1 to this Current Report on Form 8-K.
(b) Appointment of New Independent Registered Public Accounting Firm
On April 29, 2020, the Audit Committee approved the engagement of Deloitte & Touche LLP ("Deloitte") as the Company's independent registered public accounting firm for the fiscal year ending January 31, 2021, effective immediately. During the Company's two most recent fiscal years ended January 31, 2020 and 2019, and during the interim period through April 29, 2020, neither the Company nor anyone acting on its behalf consulted with Deloitte regarding any of the matters described in Items 304(a)(2)(i) and (ii) of Regulation S-K. Deloitte is aware of the material weaknesses described in Item 4.01(a) above and understands it is a reportable event.