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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): June 7, 1996
ALL AMERICAN COMMUNICATIONS, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-14333 95-3803222
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(Commission File (I.R.S. Employer
Number) Identification Number)
808 Wilshire Boulevard, Santa Monica, California 90401
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(Address of Principal Executive Offices)
(310) 656-1100
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(Registrant's Telephone Number, Including Area Code)
2114 Pico Boulevard, Santa Monica, California 90405
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
On June 7, 1996, the Audit Committee (the "Audit Committee") of All
American Communications, Inc. (the "Company") approved the engagement of Price
Waterhouse LLP as its independent accountants as a replacement of the Company's
prior independent accountants, Ernst & Young LLP.
The audit reports of Ernst & Young LLP on the consolidated financial
statements of the Company for the two fiscal years ended December 31, 1995 did
not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles.
Ernst & Young LLP audited the Company's 1995 and 1994 financial
statements in addition to auditing financial statements for certain prior fiscal
years. In connection with the Company's two most recent fiscal years ended
December 31, 1995 and any subsequent interim period, the Company believes that
there were no disagreements with Ernst & Young LLP on any manner of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to their satisfaction, would have caused them
to make reference to the subject matter of the disagreement in connection with
this Report. However, following discussions with Ernst & Young LLP subsequent to
their termination, the Company notes two accounting matters which Ernst & Young
LLP believes constitute disagreements within the meaning of Item 304 of
Regulation S-K but which were both resolved to Ernst & Young LLP's satisfaction
prior to the issuance of their reports on the aforementioned financial
statements.
The first matter involved certain communications between the Company
and Ernst & Young LLP involving the Company's accounting during certain periods
prior to the 1994 reporting period for the capitalization and deferral of
advance royalties paid to recording artists. As recently as March 1996, the
Company contended, subject to the receipt of additional information, that Ernst
& Young LLP had recently interpreted such standards differently (and less
restrictively) in dealings with another publicly traded music client. Ernst &
Young LLP has advised the Company that such standards have been interpreted on a
consistent basis in relation to all of its clients in accordance with generally
accepted accounting principles.
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The second matter, in connection with the audit of the financial
statements for the year ended December 31, 1995, involved a proposed reduction
of $700,000 by the Company in the reserve accounts in the Recorded Music segment
and an equal increase in the reserve accounts in the Television segment. After
Ernst & Young LLP informed the Company's management that the full amount of the
adjustment could not be supported, the Company did not make such adjustment.
In connection with the Company's audit for the current fiscal year, the
Company solicited bids from independent accountants, including Ernst & Young
LLP, for accounting services to be provided to the Company. Ernst & Young LLP
submitted a bid but was not selected and thus its services have been terminated.
The winning bidder was Price Waterhouse LLP.
The Company requested Ernst & Young LLP to furnish the Company with a
letter addressed to the Securities and Exchange Commission stating whether Ernst
& Young LLP agrees with the statements made by the Company in response to this
Item 4 and, if not, stating the respects in which Ernst & Young LLP does not
agree.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
c. Exhibits
To be filed by amendment.
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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, in Santa Monica, California, on
June 14, 1996.
All American Communications, Inc.
By: /s/ ANTHONY J. SCOTTI
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Name: Anthony J. Scotti
Title: Chairman
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