Item 4.01. Changes in Registrant’s Certifying Accountant.
(a) The Audit Committee (the “Committee”) of the Board of Directors of XPEL, Inc. ( “XPEL” or the “Company”) recently conducted a competitive selection process to determine the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. The Committee invited several international public accounting firms to participate in this process, including Baker Tilly US, LLP, or Baker Tilly, the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2020. As a result of this process, on July 13, 2021, the Committee approved the appointment of Deloitte & Touche LLP, or Deloitte, as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. This action effectively dismissed Baker Tilly as the Company’s independent registered public accounting firm as of July 13, 2021.
The audit reports of Baker Tilly on the consolidated financial statements of XPEL and its subsidiaries as of and for the years ended December 31, 2020 and December 31, 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.
In connection with the audit of the Company’s consolidated financial statements for the fiscal years ended December 31, 2020 and December 31, 2019 and through the date of this Current Report, there were: (i) no disagreements between the Company and Baker Tilly on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Baker Tilly, would have caused Baker Tilly to make reference to the subject matter of the disagreement in their report on the Company’s financial statements for such year, and (ii) no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S‐K.
The Company has provided Baker Tilly a copy of the disclosures in this Form 8‐K and requested that Baker Tilly furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not Baker Tilly agrees with the Company’s statements in this Item 4.01(a). A copy of such letter, dated July 13, 2021 is filed as Exhibit 16.1 to this Form 8-K.
The Audit Committee of the Board of Directors of the Company approved the change in the independent registered public accounting firm described herein.
(b) Effective on July 13, 2021, the Audit Committee of the Board of Directors of the Company approved the appointment of Deloitte & Touche LLP, or Deloitte, as its independent registered public accounting firm to audit the Company’s consolidated financial statements. During the two most recent fiscal years and through the date of this current report the Company had not consulted with Deloitte with respect to: (i) the application of accounting principles to a specified transaction, either completed or proposed or the type of audit opinion that might be rendered on the Company’s financial statements and no written report or oral advice was provided to the Company by Deloitte that Deloitte concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
