UNITED STATES
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) July 8,1999
FRANKLIN FINANCIAL SERVICES CORPORATION
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-12126 23-144083
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Ident. No.)
20 South Main Street, Chambersburg,PA 17201
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (717) 264-6116
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N/A
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(Former name or former address, if changes since last report)
Item 4. Change in Registrant's Certifying Accountants
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On July 8, 1999, the Board of Directors of Franklin
Financial Services Corporation (Corporation) unanimously
determined that it would discontinue the engagement of Arthur
Andersen LLP, Lancaster, PA (AA), as its independent auditors upon
the unanimous recommendation of the Audit Committee and
unanimously determined that the Corporation will engage Beard &
Company, Inc., Certified Public Accountants, Harrisburg,
Pennsylvania, (Beard), as the Corporation's auditors for the
fiscal year ending December 31, 1999. The Corporation's
decisions were effective July 8, 1999.
AA audited the consolidated financial statements of the
Corporation for the years ended December 31, 1998 and 1997. The
termination of AA was not due to any disagreements with AA as to
any matters of accounting policies, procedures or practices or
with respect to financial statements disclosure. AA's report on
the financial statements for the two most recent fiscal years of
the Corporation did not contain an adverse opinion or disclaimer
of opinion, nor were such reports qualified or modified as
to uncertainty, audit scope or accounting principles.
During the Corporation's two fiscal years ended December 31,
1997 and 1998 and the subsequent interim period preceding the
termination of AA, there were no disagreements with AA on
any matter of accounting principles or practices, financial
statements disclosure or auditing scope or procedure.
During the Corporation's two fiscal years ended December
31, 1998 and 1997 and the subsequent interim period preceding
AA's termination, AA did not advise the Corporation of any of
the following:
(A) that the internal controls necessary for the
Corporation to develop reliable financial statements did not
exist;
(B) that information had come to AA's attention that had led
it to no longer be able to rely on management's representations,
or that made it unwilling to be associated with the financial
statements prepared by management;
(C) (1) of the need to expand significantly the scope of
the Corporation's audit, or that information had come to AA's
attention during such time period that if further investigated
might (i) materially impact the fairness or reliability of
either: a previously issued audit report or the underlying
financial statements, or the financial statements issued or to be
issued covering the fiscal periods subsequent to the date of the
most recent financial statements covered by an audit report
(including information that may prevent it from rendering an
unqualified audit report on those financial statements); or (ii)
cause it to be unwilling to rely on management's representations
or be associated with the Corporation's financial statements and
(2) due to AA's termination, or for any other reason, AA
did not so expand the scope of its audit or conduct
such further investigation; or
(D) (1) that information had come to AA's attention that it
had concluded materially impacted the fairness or reliability of
either (i) a previously issued audit report or the underlying
financial statements, or (ii) the financial statements issued or
to be issued covering the fiscal periods subsequent to the date
of the most recent financial statements covered by an audit
report (including information that, unless resolved to AA's
satisfaction, would prevent it from rendering an unqualified
audit report on those financial statements), and
(2) due to AA's termination, or for any other reason, the
issue has not been resolved to AA's satisfaction prior
to its termination.
During the Corporation's two fiscal years ended December 31,
1998 and 1997 and the subsequent interim period preceding Beard's
appointment, neither the Corporation nor any person acting on its
behalf consulted Beard regarding: (1) application of accounting
principles to a specified transaction, either completed or
proposed, (2) the type of audit opinion that might be rendered on
the Corporation's financial statements, or (3) any matter that was
the subject of a disagreement (as defined in Item 304(a)(1)(iv) of
Regulation S-K and its related instructions) with AA or constituted
a reportable event (as described in Item 304(a)(1)(v) of
Regulation S-K).
AA has been requested by the Corporation to review this
disclosure and furnish the Corporation with a letter addressed to
the Securities and Exchange Commission stating whether they agree
with the statements made by the Corporation with respect to AA,
and, if not, stating the respects on which it does not agree. For
a copy of AA's response, see Exhibit 16.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
16 Response of Arthur Andersen LLP
July 14, 1999
Office of the Chief Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir/Madam:
We have read Item 4 included in the Form 8-K dated July 8, 1999 of
Franklin Financial Services Corporation (the Corporation) filed with
the Securities and Exchange Commission and are in agreement with the
statements contained therein. We have no knowledge as to whether the
Corporation consulted with Beard & Company, Inc. regarding the
application of accounting principles or the type of opinion that
might be rendered on the Corporation's financial statements.
Very truly yours,
/s/ARTHUR ANDERSEN LLP
Signatures
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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.
FRANKLIN FINANCIAL SERVICES CORPORATION
By: /s/ Elaine G. Meyers
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Elaine G. Meyers
Treasurer and Chief Financial Officer
Dated July 14, 1999
