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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 (Date of earliest event reported) November 2, 1998
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Nationwide Credit, Inc.
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(Exact name of registrant as specified in its charter)
Georgia 0001059083 58-1900192
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6190 Powers Ferry Road, 4th Floor, Atlanta, Georgia 30339
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(Address of principal executive offices)
Registrant's telephone number, including area code______________________________
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(Former name or former address, if changed since last report.)
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Effective November 2, 1998, Nationwide Credit, Inc. (the "Company")
dismissed Ernst & Young LLP, the Company's independent accounting firm which was
previously engaged by the Company's predecessor parent, First Data Corporation,
to be the principal accountant to audit the Company's financial statements.
Effective November 2, 1998, the Company retained the services of Arthur Andersen
LLP ("Arthur Andersen") as the principal accountant to audit the Company's
financial statements. The decision to change accountants was recommended and
approved by the Company's Board of Directors.
Ernst & Young's reports on the Company's financial statements for the two
most recent fiscal years ended December 31, 1996 and December 31, 1997 did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting principles. In
connection with the audits of the Company's financial statements for each of the
two fiscal years ended December 31, 1996 and December 31, 1997, and all
subsequent interim periods preceding Ernst & Young's dismissal, (i) there were
no disagreements with Ernst & Young on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure which,
if not resolved to the satisfaction of Ernst & Young, would have caused it to
make reference to the subject matter of the disagreement in its report.
Except as set forth in the following sentences of this paragraph, none of
the kinds of events listed in paragraph (a) (1) (v) of Item 304 of Regulation S-
K occurred. In conjunction with its completed audit of the Company's financial
statements as of and for the nine month period ended September 30, 1997 and its
upcoming audit of the Company's financial statements as of and for the year
ended December 31, 1997, Ernst & Young, in a letter dated October 31, 1997,
advised the Company's then Chief Financial Officer of a material weakness
involving its internal control structure. The Company has authorized Ernst &
Young to respond fully to the inquiries of Arthur Andersen concerning the
Company's control environment. Ernst & Young's letter defined a material
weakness to be "a reportable condition in which the design or operation of one
or more of the specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the consolidated financial statements being
audited may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions". The letter indicated
that the following were the elements needed for the Company to make the
necessary improvements in its control structure:
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1. Procedures must be in place to ensure that transactions are recorded in the
Company's accounting records accurately and on a timely basis.
2. Effective reconciliation procedures must be in place; this includes bank
statement reconciliation as well as reconciliation of general ledger
accounts to supporting detail.
3. Personnel having adequate skill, knowledge and training must be in place to
effectively execute and supervise the first two elements.
The Company has taken actions it believes are adequate to address the
foregoing.
During the Company's two most recent fiscal years ended December 31, 1996
and December 31, 1997, and all subsequent interim periods preceding its
engagement of Arthur Andersen, neither the Company nor anyone on its behalf
consulted Arthur Andersen regarding any matter described in Item 304 (a) (2) (i)
or (ii) of Regulation S-K.
The Company has provided Ernst & Young with a copy of the disclosures it is
making in this Current Report on Form 8-K (the "Report") prior to the filing of
this Report with the Securities and Exchange Commission (the "Commission").
Ernst & Young has furnished a letter addressed to the Commission, a copy of
which is attached hereto as Exhibit 1, stating that it agrees with the
statements made by the Company herein in response to Item 304 (a) of Regulation
S-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits:
1. Letter dated November 9, 1998 from Ernst & Young LLP
SIGNATURES
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.
Nationwide Credit, Inc.
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(Registrant)
Date 11-9-98 /s/ Michael Lord
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(Signature)
Chief Financial Officer
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(Name & Title)
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EXHIBIT (C)
[LOGO] ERNST & YOUNG LLP . Suite 2800 . Phone: 404 874 8300
600 Peachtree Street
Atlanta, Georgia 30306-2215
November 9, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We have read Item 4 of Form 8-K dated November 9, 1998 of Nationwide Credit,
Inc. (the "Company") and are in agreement with the statements contained in
paragraphs two, three and six on pages one and two therein. We have no basis to
agree or disagree with other statements of the Company contained therein.
Regarding the Company's statement concerning the lack of internal control to
prepare financial statements, included in paragraph 3 on page 1 therein, we had
considered such matter in determining the nature, timing and extent of
procedures performed in our audits of the Company's 1997 financial statements.
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
