AES Corp Replaces Auditor (EY) with KPMG Ahead of Merger

What Happened

• On July 21, 2026, AES Corporation’s Audit Committee dismissed Ernst & Young LLP (EY) as the company’s independent registered public accounting firm and engaged KPMG LLP as successor, with the change effective upon filing AES’s Form 10‑Q for the quarter ended June 30, 2026. The dismissal stems from EY no longer being independent with respect to AES after the closing of an announced merger under the Agreement and Plan of Merger with Horizon Parent, L.P. and Horizon Merger Sub, Inc. (Parent is jointly controlled by vehicles affiliated with Global Infrastructure Management, LLC and EQT Infrastructure VI).
• EY’s audit opinions on AES’s consolidated financial statements for fiscal years 2024 and 2025 were unqualified, but EY issued an adverse opinion on AES’s internal control over financial reporting as of December 31, 2024 due to a management-identified material weakness related to the AES Brasil disposition process. Other than that material weakness, AES reports no disagreements or reportable events with EY for 2024, 2025 or the interim period.

Key Details

• Date of Audit Committee action: July 21, 2026; dismissal effective upon filing the June 30, 2026 Form 10‑Q.
• EY’s internal control adverse opinion referenced a material weakness disclosed in AES’s 2024 Form 10‑K (filed March 11, 2025).
• KPMG engagement: KPMG selected July 21, 2026. During the 2026 audit period, certain KPMG international member firms had provided limited services (tax advice, payroll processing, employment legal advice, financial model review) to some AES subsidiaries that would be considered impermissible under SEC rules — those services were completed or terminated before KPMG’s appointment.
• Both KPMG and AES’s Audit Committee concluded the prior services do not impair KPMG’s objectivity or independence; EY’s letter to the SEC dated July 27, 2026 is filed as Exhibit 16.1.

Why It Matters

• Auditor change: A switch from EY to KPMG is material for investors because it affects who audits AES’s financial statements going forward and may influence continuity of audit approach and timing.
• Internal controls: The 2024 adverse opinion on internal controls (material weakness related to AES Brasil disposition) remains a disclosed control issue investors should monitor for remediation progress.
• Merger linkage: The auditor change is directly tied to the pending merger, which triggered EY’s independence concern—investors tracking the merger closing should note related governance and reporting changes.
• No disagreements or reportable events (other than the disclosed material weakness) were reported between AES and EY, and KPMG and the Audit Committee both stated independence is not impaired.