SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
__________________
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: May 5, 1997
NOVA NATURAL RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 0-15078 84-1227328
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File No.) Identification No.)
789 Sherman St.,Suite 550,Denver,Colorado 80203
(Address of principal executive offices) (Zip Code)
(303)863-1997
(Registrant's telephone number, including area code)
ITEM 4. Change in Accountants
On May 5, 1997, the Registrant received a letter from KPMG
Peat Marwick LLP ("KPMG") in which KPMG notified the Registrant
that KPMG was withdrawing as auditor for the Registrant, effective
May 2, 1997.
In a letter to the Company's Board of Directors following its
1996 audit, KPMG commented on a certain matter involving the
internal control structure and its operation that KPMG considered
a reportable condition under standards established by the American
Institute of Certified Public Accountants in regard to segregation
of duties, as follows:
"We observed that the accountant is responsible for
restrictively endorsing all checks received, preparing deposit
slips, taking the deposit to the bank, posting the cash
receipts, and recording the related trade receivables/revenue.
The accountant is also responsible for preparing the check
run, mailing the signed checks, and recording the related
trade payables/expense. Furthermore, the same accountant
performs the monthly cash reconciliation.
Failure to require checks to be restrictively endorsed by an
independent party prior to being given to the accounts
receivable clerk could result in errors or irregularities
going undetected. An individual independent of the accounts
receivable function should restrictively endorse all checks
and run an adding machine tape of all checks received.
Subsequently, the independent party should compare the adding
machine tape to the validated bank deposit slip.
Failure by an independent party to review canceled checks and
the cash reconciliations could also result in errors and
irregularities going undetected. An individual independent of
the accounts payable function should review all canceled
checks, bank statements and cash reconciliations monthly.
Proper segregation of duties within the cash receipts and
disbursements functions will ensure that all receipts and
disbursements are properly and accurately recorded."
At this time, the Registrant has not engaged a new auditor,
but expects to do so expeditiously.
KPMG Peat Marwick LLP's auditors' report on the consolidated
financial statements of the Registrant as of and for the years
ended September 30, 1996 and 1995, contained a separate paragraph
stating that:
Fiscal 1996 Independent Auditors' Report:
"The accompanying financial statements have been prepared
assuming that the Company will continue as a going
concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses and
cash flow deficits from operations which, along with
other factors described in Note 2, raise substantial
doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also
described in Note 2. The financial statements do not
include any adjustments that might result from the
outcome of this uncertainty."
Fiscal 1995 Independent Auditors' Report:
"The accompanying financial statements have been prepared
assuming that the Company will continue as a going
concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses
from operations which, along with other factors described
in Note 2, raise substantial doubt about its ability to
continue as a going concern. Management's plans in
regard to these matters are also described in Note 2.
The financial statements do not include any adjustments
that might result from the outcome of this uncertainty."
The decision to change auditors was neither recommended nor
approved by the Registrant's Board of Directors, which has no audit
committee.
There have been no disagreements between the Company and KPMG
during the period for which KPMG served as the Company's auditors.
A letter from KPMG is attached as Exhibit "A".
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.
NOVA NATURAL RESOURCES CORPORATION
(Registrant)
By: _______________________________________
Brian B. Spillane, President
By: _______________________________________
James R. Schaff, Secretary-Treasurer
May 12, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously principal accountants for Nova Natural Resources
Corporation and, under the date of November 27, 1996, we reported
on the financial statements of Nova Natural Resources Corporation
as of and for the years ended September 30, 1996 and 1995. On May
2, 1997, we resigned. We have read Nova Natural Resources
Corporation's statements included under item 4 of its Form 8-K
dated May 5, 1997, and we agree with such statements.
Very truly yours,
KPMG Peat Marwick LLP
Mr. Thaddeus J. Senko
Partner
