Papa John's dismisses KPMG as its auditor, hires EY

FILE PHOTO: The Papa John's store in Westminster, Colorado, U.S. August 1, 2017. REUTERS/Rick Wilking

(Reuters) - Papa John's International Inc said on Friday it dismissed KPMG LLP as its financial auditor and appointed Ernst & Young LLP, which served as its bookkeeper from 1990 to 2017, to handle its accounts for the fiscal year ending December 2019, according to a regulatory filing

Papa John’s disclosed in February that it was unable to file its annual report for the year ended Dec. 30, 2018, on time because KPMG required more time to complete its audit of the company’s financial statements.

When the annual report was filed in March, KPMG said in it that it found the company did not maintain effective internal control over its financial reporting for that year.

In May, Papa John’s made an amended filing in which it said although it found some ‘material weaknesses’ in its internal reporting controls, there was no need to restate its financial statement.

The company, which settled a bitter fight with its founder John Schnatter over control in March, has been working to fix its brand image after Schnatter reportedly used a racial slur on a media training conference call last year.

Schnatter has cut his stake in Papa John’s after reaching the settlement to about 19% as of May 16.

Meanwhile the company has named former basketball star Shaquille O’Neal as a board member, brand ambassador and investor in March as part of an attempt to boost its image.

Shares of Papa John’s were unchanged at $50.74 in extended trading on Friday.

Reporting by Soundarya J and Ankit Ajmera in Bengaluru; Editing by James Emmanuel and Sonya Hepinstall