SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): May 23, 1994
IDB COMMUNICATIONS GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-14972 93-0933098
(Commission (I.R.S. Employer
File No.) Identification No.)
10525 WEST WASHINGTON BOULEVARD, CULVER CITY, CALIFORNIA 90232-1922
(Address of Principal Executive Offices) (Zip Code)
(213) 870-9000
(Registrant's Telephone Number, Including Area Code)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On May 23, 1994, the Registrant was informed by its
independent auditors, Deloitte & Touche ("Deloitte"), of
Deloitte's resignation, effective as of that date.
The reports of Deloitte on the financial statements of the
Registrant for each of the two fiscal years in the period ended
December 31, 1993 did not contain any adverse opinion or
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
In the opinion of management of the Registrant, the financial
statements contained in the Registrant's report on Form 10-Q for the
first quarter of 1994 appropriately reflect all business transactions
and all adjustments necessary for a fair presentation of the
financial position and the results of operations of the Registrant
for the periods presented.
On April 25, 1994, prior to the Registrant's release of its
financial results for the first quarter of 1994, Deloitte
informed the Registrant that Deloitte questioned various
adjustments that constituted a material portion of the first
quarter results. Thereafter, and prior to the prescribed due
date for its Quarterly Report on Form 10-Q for the first quarter
of 1994, the Registrant resolved certain of these issues to the
satisfaction of Deloitte. Deloitte, however, informed the
Registrant that Deloitte had concerns regarding the adequacy of
the documentation presented to them and the timing for certain
business transactions, and that as a result a material portion of
the first quarter net earnings was not, in the opinion of Deloitte,
adequately supported. On May 16, 1994 (the prescribed due date
for the Form 10-Q), the Registrant filed a Notification of Late
Filing on Form 12b-25. After a thorough investigation of these
and other business transactions related to the first quarter of
1994, the Registrant provided Deloitte with additional
documentation; however, Deloitte was unable to satisfy itself
with such transactions prior to the fifth calendar day following
the prescribed due date. Management of the Registrant was
prepared to further delay filing of the Form 10-Q in its effort
to satisfy Deloitte. On May 23, 1994, however, Deloitte abruptly
resigned, and the Registrant subsequently filed its Form 10-Q
later that day. Subsequent to its resignation, Deloitte has
orally informed the Registrant that the failure to resolve these
issues prior to Deloitte's resignation constitutes a
"disagreement" or "disagreements" required to be reported
pursuant to Item 304 of Regulation S-K.
Deloitte had previously expressed concern to the Registrant,
in connection with the Registrant's first quarter 1992 financial
results, over the accuracy of the Registrant's internally
generated financial statements and the process surrounding the
earnings release for that quarter. These matters were resolved
to Deloitte's satisfaction, and Deloitte subsequently informed
the Registrant that the condition of the Registrant's underlying
accounting records had improved dramatically. Since the second
quarter of 1992, Deloitte has undertaken quarterly reviews of the
Registrant's financial statements, and had never again criticized
the Registrant's procedures. In fact, Deloitte complimented the
Registrant on the Registrant's improved procedures and internal
controls earlier this year in connection with Deloitte's audit of
the Registrant's financial results for the year ended December
31, 1993. Notwithstanding the satisfactory resolution of these
matters, Deloitte subsequent to its resignation orally informed
the Registrant that its
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concern with respect to the financial results for the first
quarter of 1992 may have constituted a "reportable event" within
the meaning of Item 304 of Regulation S-K.
As a result of its concerns in 1992 and the events
surrounding the release and reporting of the Registrant's
financial results for the first quarter of 1994, Deloitte has
questioned the adequacy of the Registrant's procedures relating
to its interim financial reporting and has advised the Registrant
that Deloitte has questions concerning its ability to rely on
management's representations.
Deloitte has never presented a written report, or otherwise
communicated its concerns in writing, to the Registrant or the
Audit Committee of the Board of Directors of the Registrant, and,
prior to its resignation, Deloitte had not informed the
Registrant of the existence of any "disagreement" or "reportable
event" within the meaning of Item 304 of Regulation S-K.
The Audit Committee of the Board of Directors of the
Registrant and representatives of Deloitte met and discussed the
subject matter of the concerns of Deloitte on May 13, 1994 and
May 23, 1994. The Audit Committee concluded that the
transactions questioned by Deloitte prior to its resignation were
properly recorded in the first quarter of 1994, and that the
other adjustments to the Registrant's financial results for the
first quarter of 1994 were also appropriate.
The Registrant has authorized Deloitte to respond fully to
the inquiries of the Registrant's successor accountant and has
requested that Deloitte provide the Registrant with a letter
addressed to the SEC, as required by Item 304(a)(3) of Regulation
S-K, so that the Registrant can file such letter with the SEC
within ten business days after the filing of this report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
--------------------------------------------
None.
(b) Pro Forma Financial Information.
--------------------------------
None.
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(c) Exhibits.
---------
Exhibit
No. Description
-------- -----------
16.1 Letter re Change in Certifying
Accountant*
_______________
* To be filed by amendment.
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 the City of
Culver City, State of California, on May 31, 1994.
IDB COMMUNICATIONS GROUP, INC.
By: \s\ Edward R. Cheramy
----------------------
Edward R. Cheramy
President
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