SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: AUGUST 2, 1999
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(Date of earliest event reported)
SURREY, INC.
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(Exact name of registrant as specified in its charter)
TEXAS 001-13383 74-2138564
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(State or other jurisdiction of Commission (I.R.S. Employer
incorporation or organization) File No. Identification No.)
13110 TRAILS END ROAD
LEANDER, TEXAS 78641
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(Address of principal executive offices) (Zip Code)
(512) 267-7172
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(Registrant's telephone number, including area code)
<PAGE>
Item 4. Changes in Registrant's Certifying Accountant.
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On August 2, 1999, Surrey, Inc. and Ernst & Young LLP ("E&Y") ceased
their current client-auditor relationship. E&Y served as Surrey's independent
certifying auditors for the fiscal years 1995, 1996, 1997 and 1998. No report of
E&Y for any such period contained an adverse opinion or disclaimer of opinion,
or was qualified or modified in any way. The decision to change accountants was
not recommended or approved by the Audit Committee or the Board of Directors of
Surrey.
There has been no disagreement between Surrey and E&Y on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure. In April 1999, E&Y advised the Board of Directors of Surrey
that it saw a "material weakness" in Surrey's internal controls, namely the need
for updated inventory software and the need for Surrey to hire a controller and
additional accounting personnel. E&Y stated that such report did not effect its
report, dated February 9, 1999, on the financial statements of Surrey for the
two fiscal years ended December 31, 1998. The Board of Directors discussed the
recommendations at its April 1999 meeting and generally agreed with the
recommendations made by E&Y. The Board recommended to management that new
inventory software and controls should be implemented after the hiring of a
controller. Management is currently reviewing the related costs of implementing
the E&Y recommendations and the Board intends to further address these matters
at the next Board meeting.
Surrey is currently in the process of selecting a new firm of
certifying accountants.
Item 7 (c). Exhibits.
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1 Letter from former certifying accountant.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, hereunto duly authorized.
Dated: August 4, 1999 Surrey, Inc.
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Registrant
By: /s/ Mark J. van der Hagen
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Mark J. van der Hagen
Vice President - Finance
and Treasurer
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Exhibit 1
LETTER FROM FORMER CERTIFYING ACCOUNTANTS
ERNST & YOUNG LLP
* Suite 1400 * Phone: 512-478-9881
700 Lavaca Fax: 512-473-3499
Austin, Texas 78701
EXHIBIT 1 TO FORM 8-K
August 3, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
We have read Item 4 of Form 8-K dated August 3, 1999, of Surrey, Inc. and
are in agreement with the statements contained in the first paragraphs
therein. We have no basis to agree or disagree with other statements of
the registrant contained therein.
Very truly yours,
/s/ Ernst & Young LLP
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
