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Securities and Exchange Commission
Washington, D.C. 20549
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FORM 8-K
Amendment No. 1
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 11, 1999
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Westar Financial Services Incorporated
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(Exact name of registrant as specified in its charter)
Washington 2-95465-S 91-17115252
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number
505 E. Union, #300, Olympia, Washington 98501
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (306) 754-6227
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(Former name or former address, if changed since last report)
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Item 4. Changes in Registrant's Certifying Accountant
In compliance with the requirements of Item 304 of Regulation S-K, the
Registrant makes the following disclosures with respect to a change in its
certifying accountants:
On March 11, 1999, Westar Financial Services Incorporated (the
"Registrant") dismissed the accounting firm of KPMG, LLP ("KPMG") and
re-engaged the accounting firm of BDO Seidman LLP ("BDO") as
principal accountants for the year ended March 31, 1999. The
Registrant re-engaged BDO based on BDO's excellent reputation, its
prior experience with the Registrant, and its expertise in the
financial services industry. The Registrant's Audit Committee
approved the dismissal of KPMG and the engagement of BDO on March
11, 1999.
During the one fiscal year audited by KPMG and the subsequent interim
period prior to March 11th, there has been a disagreement with KPMG
on one matter of accounting principle and no disagreement on any
practices, financial statement disclosure, or auditing scope or
procedure or any reportable events.
Because Registrant had not demonstrated a history of profitability at
March 31, 1998, KPMG made the judgement that the Company should
establish a 100% allowance for its deferred tax asset. The
Registrant's Audit Committee discussed the disagreement with KPMG on
at least two occasions. The Company disagreed with KPMG's judgement;
with KPMG's use of a standard more restrictive than SEC guidelines
for determination of the need for an allowance; and, with KPMG's
decision to not weigh more heavily recent significant improvements
in the Company's volumes, operating margins and profits. The
disagreement has been resolved to KPMG's satisfaction. The
Registrant has authorized KPMG to respond fully to inquiries of BDO
concerning the disagreement.
On September 2, 1998 Westar received a letter from KPMG expressing
KPMG's concern over a "lack of original, contemporaneous
documentation" relating to whether leases originated more than two
years earlier should have been accounted for as direct financing or
operating leases. Without adequate documentation, Westar might have
been required by KPMG to report increased earnings in fiscal 1997
and fiscal 1998 of approximately $115,000 and $45,000,
respectively. Upon KPMG's request, Westar provided KPMG with
conclusive original documentation that Westar had properly
accounted for the leases in question. KPMG agreed with Westar's
conclusion. No changes to Westar's financial statements were made.
KPMG's report on the consolidated financial statements for the last
fiscal year ended March 31, 1998 contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
BDO's report on the consolidated financial statements for the previous
fiscal year ended March 31, 1997 contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
The Registrant provided the above disclosure to both KPMG and BDO, and
requested
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that KPMG furnish the Registrant with a respective letter addressed
to the Securities and Exchange Commission (the "SEC") stating whether
they agree with the above statements. A copy of KPMG's letter
dated March 22, 1999 is attached as an exhibit to this report.
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Item 7. Exhibits
(c) Exhibits.
16.2 Letter regarding change in certifying accountant--KPMG LLP
KPMG Letterhead
March 22, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously principal accountants for Westar Financial Services
Incorporated (Westar) and, under the date of February 17, 1999, we reported on
the consolidated financial statements of Westar Financial Services Incorporated
and subsidiaries as of and for the year ended March 31, 1998. On March 11,
1999, our appointment as principal accountants was terminated. We have read
Westar's statements included under Item 4 of its Form 8-K dated March 11, 1999,
and we agree with such statements, except as follows:
- We make no comment regarding the information in paragraph one of
Item 4 to the Form 8-K except that we agree with the statement that
on March 11, 1999 Westar dismissed KPMG LLP.
- We disagree with Westar's statement in the second paragraph of Item 4
to the Form 8-K that there are no reportable events and we make no
comment with respect to the fourth paragraph of Item 4 other than to
state that under letter dated September 2, 1998, to Robert
Christensen, President, we informed Mr. Christensen that in light of
the lack of original, contemporaneous documentation available to
support management's accounting for leases, we believed there was a
significant deficiency in Westar's internal controls which could
adversely affect Westar's ability to record and report financial
transactions.
- We make no comment regarding Westar's statement in the third
paragraph of Item 4 to the Form 8-K regarding the reasons for the
reported disagreement.
Very truly yours,
/S/ KPMG LLP
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KPMG LLP
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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 thereunto duly authorized.
Westar Financial services INCORPORATED
(Registrant)
/s/ R.W. Christensen, Jr.
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R.W. Christensen, Jr.
President