<PAGE> 1
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): SEPTEMBER 19, 1997
KRAUSE'S FURNITURE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-17868 77-0310773
- --------------------------------------------------------------------------------
(State or Other Jurisdiction Commission File No. (I.R.S. Employer
of Incorporation) Identification No.)
200 North Berry Street, Brea, California 92821-3903
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(714) 990-3100
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
INFORMATION TO BE INCLUDED IN REPORT
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
The Board of Directors of the Company upon the recommendation of the Audit
Committee of the Board on September 19, 1997 terminated the Company's
relationship with Ernst & Young LLP and engaged Arthur Anderson LLP as its new
independent accountant to audit the Company's financial statements. The reports
of Ernst & Young LLP on the Company's financial statements for the most recent
two years ending February 2, 1997 did not contain an adverse opinion or a
disclaimer of opinion nor were they qualified or modified as to uncertainty,
audit scope or accounting principles. During this two year period and thereafter
there were no disagreements between the Company and Ernst & Young LLP on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Ernst & Young LLP, would have caused it to make reference to the
subject matter of the disagreements in connection with its report. The Company
has authorized Ernst & Young LLP to respond fully to inquiries from Arthur
Andersen LLP concerning all matters relating to prior audits conducted by Ernst
& Young LLP.
The Company interviewed Arthur Andersen LLP before making its decision. During
this interview Company representatives sought information concerning the
potential auditor's familiarity with accounting matters affecting the furniture
manufacturing and furniture retail industries and the Company. No specific
advice was sought. The Company did not perceive that there were any differences
with regard to substantive accounting issues as between Arthur Andersen LLP and
the Company's prior auditors.
The Company has supplied a copy of this disclosure to both Ernst & Young LLP and
Arthur Andersen LLP and neither has indicated to the Company that it objects or
disagrees with this disclosure. A copy of Ernst & Young LLP's letter addressed
to the Securities and Exchange Commission in accordance with the requirements of
Rule 304(a) of Regulation S-K promulgated by the Securities and Exchange
Commission, indicating that Ernst & Young LLP agrees with the Company's
statements in this disclosure in so far as they relate to Ernst & Young LLP or
the Company's relationship with Ernst & Young LLP, is attached as Exhibit 16.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
An exhibit filed with this report is identified in the
Exhibit Index at Page 4.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KRAUSE'S FURNITURE, INC.
(Registrant)
Date: September 25, 1997 /s/ ROBERT A. BURTON
----------------------------------
Robert A. Burton
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
3
<PAGE> 4
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------------------------------------
16 Letter re Change of Certifying Accountant
4
<PAGE> 1
EXHIBIT 16
September 23, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
We have read Item 4 of Form 8-K dated September 25, of Krause's Furniture, Inc.
and are in agreement with the statements contained in the first and third
paragraphs on Page 2 therein. We have no basis to agree or disagree with other
statements of the registrant contained therein.
/s/ ERNST & YOUNG LLP
Ernst & Young LLP
5
