Cheetah Mobile Announces Appointment of New Auditor
Cheetah Mobile Inc. (NYSE: CMCM) announced the appointment of Marcum Asia CPAs LLP as its new independent auditor, effective December 2, 2022, following the dismissal of Ernst & Young Hua Ming LLP. The board of directors and the audit committee approved this change after a thorough evaluation. Ernst & Young's audits for the years 2021 and 2020 showed no adverse opinions, though material weaknesses regarding financial control in tax management were reported. The company is working to ensure a seamless transition with Marcum Asia and EY.
- Appointment of Marcum Asia demonstrates commitment to improving audit processes.
- No adverse opinions from previous auditor indicate stability in financial reporting.
- Material weaknesses reported in tax management controls could raise concerns among investors.
- Transition between auditors could lead to potential disruptions in financial reporting.
BEIJING, Dec. 5, 2022 /PRNewswire/ -- Cheetah Mobile Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading internet company, today announced the appointment of Marcum Asia CPAs LLP ("Marcum Asia") as its independent registered public accounting firm, effective December 2, 2022. On the same date, the Company dismissed Ernst & Young Hua Ming LLP ("EY"). The change of the Company's independent auditor was made after a careful and thorough evaluation process and has been approved by Cheetah Mobile's board of directors and the audit committee (the "Audit Committee").
EY's audit reports on the Company's consolidated financial statements as of and for the years ended December 31, 2021 and 2020 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
During the audit for fiscal years ended December 31, 2021 and 2020 and the subsequent interim period through December 2, 2022, there were no (i) disagreements, as defined in Item 16F(a)(1)(iv) of Form 20-F and the related instructions, between the Company and EY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of EY, would have caused EY to make reference to the subject matter of the disagreements in connection with its reports on the consolidated financial statements, or (ii) reportable events as defined in Item 16F(a)(1)(v) of Form 20-F other than:
a. the material weakness reported in our 2021 annual report on Form 20-F filed with the U.S. Securities and Exchange of Commission (the "SEC") on July 26, 2022, specifically, the material weakness identified as of December 31, 2021 was in the Company's controls over the projected financial information used in the impairment assessment of an equity investment.
b. the material weakness reported in our 2020 annual report on Form 20-F filed with the SEC on May 14, 2021, specifically, the material weakness identified as of December 31, 2020 was that the Company did not have a sufficient complement of resources in the tax department to perform the management review controls over income taxes.
The Audit Committee discussed the reportable events mentioned above with EY. EY is authorized to fully respond to the inquiries of Marcum Asia on the reportable events.
During the Company's two most recent fiscal years ended December 31, 2021 and 2020 and any subsequent interim period prior to the engagement of Marcum Asia on December 2, 2022, neither the Company nor anyone on its behalf has consulted with Marcum Asia on either (a) 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 consolidated financial statements, and neither a written report nor oral advice was provided to the Company by Marcum Asia that Marcum Asia concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (b) any matter that was the subject of a disagreement, as that term is defined in Item 16F(a)(1)(iv) of Form 20-F (and the related instructions thereto) or a reportable event as set forth in Item 16F(a)(1)(v) of Form 20-F.
The Company is working closely with Marcum Asia and EY to ensure a seamless transition.
About Cheetah Mobile Inc.
Cheetah Mobile is a leading internet company. It has attracted hundreds of millions of monthly active users through an array of internet products such as Clean Master, Security Master and several casual games. The Company provides advertising services to advertisers worldwide as well as value-added services including the sale of premium membership and in-app virtual items to its users. Cheetah Mobile is also committed to leveraging its cutting-edge artificial intelligence technologies to power its products and make the world smarter. It has been listed on the New York Stock Exchange since May 2014.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Statements that are not historical facts, including statements about Cheetah's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. All information provided in this press release is as of the date of this press release, and Cheetah does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Investor Relations Contact
Cheetah Mobile Inc.
Tel: +86 10 6292 7779
Email: ir@cmcm.com
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SOURCE Cheetah Mobile
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