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10-K
PENSKE AUTOMOTIVE GROUP, INC. filed this Form 10-K on 02/24/2017
Entire Document
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

 

To the Board of Directors and Stockholders of Penske Automotive Group, Inc.
Bloomfield Hills, Michigan

 

We have audited the accompanying consolidated balance sheets of Penske Automotive Group, Inc. and subsidiaries (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedule listed in the Index at Item 15. We also have audited the Company’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and financial statement schedule and an opinion on the Company’s internal control over financial reporting based on our audits. We did not audit the financial statements or the effectiveness of internal control over financial reporting of Sytner Group Limited (a consolidated subsidiary) as of and for the year ended December 31, 2016, which statements reflect total assets constituting 21% of consolidated total assets as of December 31, 2016, and total revenues constituting 32%  of consolidated total revenues for the year then ended. We also did not audit the financial statements of UAG UK Holdings Limited and subsidiaries (a consolidated subsidiary) as of and for the years ended December 31, 2015 and 2014, which statements reflect total assets constituting 41% of consolidated total assets as of December 31, 2015, and total revenues constituting 39% and 40% of consolidated total revenues for the years ended December 31, 2015, and 2014, respectively. The financial statements and the effectiveness of internal control over financial reporting of Sytner Group Limited for the year ended December 31, 2016 were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included and effectiveness of internal control over financial reporting for Sytner Group Limited for the year ended December 31, 2016, is based solely on the report of the other auditors. The financial statements of UAG UK Holdings Limited and subsidiaries’ for the years ended December 31, 2015 and 2014 were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for UAG UK Holdings Limited and subsidiaries for the years ended December 31, 2015 and 2014, is based solely on the reports of the other auditors.

 

As described in the accompanying Management Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Clare James Automotive (“Lightcliffe”), a subsidiary of Sytner Group Limited, which was acquired in July 2016 and which represent total assets and total revenues constituting less than 1% of the Company’s consolidated total assets and consolidated total revenues as of December 31, 2016 and for the year ended December 31, 2016. Accordingly, our audit and that of the other auditors did not include the internal control over financial reporting at Lightcliffe.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinions.

 

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with

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