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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)
May 14, 1999 (May 10, 1999)
DELPHI INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-15946 77-0021975
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(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
3501 Algonquin Road, Suite 500, Rolling Meadows, IL 60008
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 847-506-3100
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Item 4. Changes in Registrant's Certifying Accountant.
a(1) Dismissal of Independent Accountant
(i) On May 10, 1999, the Registrant advised Arthur Andersen LLP
("Andersen") that the Registrant intended to retain a different
independent accounting firm for the audit of its financial statements
for the year ending December 31, 1999. Andersen had been engaged as
the principal accountant to audit the Registrant's consolidated
financial statements.
(ii) Andersen's report on the Registrant's consolidated financial
statements for the transition period ended December 31, 1998 (the
"Transition Period") had an explanatory paragraph that stated that
the consolidated financials statements of the Registrant had been
prepared assuming that the Company will continue as a going concern.
The footnotes to the statements discussed that the going concern
comment was necessary because of the effects of a shortfall between
the amount then being made available to the Registrant by its lender
under the Registrant's line of credit and the Registrant's projected
cash requirements. None of the other reports by Andersen during the
past two years contained any adverse opinion or disclaimer of opinion
and no other such reports were qualified or modified as to
uncertainty, audit scope or accounting principles.
(iii) The Audit Committee of the Registrant's Board of Directors
recommended the action taken with respect to Andersen.
(iv) There have been no disagreements with Andersen on any matter of
accounting principles or practices, financial statement disclosure or
auditing scope or procedure during the Registrant's two most recent
fiscal years or in the subsequent interim period through May 10, 1999
(date of termination) which disagreement(s), if not resolved to
Andersen's satisfaction, would have caused Andersen to make reference
to the subject matter of disagreement(s) in connection with its
report, except as follows. In connection with the preparation
regarding the Transition Period, Andersen and the Registrant
disagreed regarding the application of the recently adopted SOP 97-2
(regarding revenue recognition for software licenses) to a limited
number of Registrant's contracts containing extended payment terms.
The disagreement was resolved to the satisfaction of Andersen.
Andersen discussed the subject matter of the disagreement with the
Registrant's management and members of the Registrant's Audit
Committee. The Registrant has authorized Andersen to respond fully to
inquiries of any successor accountants for the Registrant regarding
such issue.
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(v) Andersen did not advise the Registrant during the Registrant's two
most recent fiscal years or in the subsequent interim period through
May 10, 1999 (the date of termination);
(A) that the internal controls necessary for the Registrant to
develop reliable financial statements did not exist;
(B) that information had come to its attention that had led it to no
longer be able to rely on management's representations, or that
had made it unwilling to be associated with the financial
statements prepared by management;
(C) (1) of the need to expand significantly the scope of its audit,
or that information had come to its attention during the two most
recent fiscal years or in the subsequent interim period through
May 10, 1999, that if further investigated might (I) materially
have impacted 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 period(s) subsequent covered by an audit report or (ii)
have caused it to be unwilling to rely on management's
representations or be associated with the Registrant's financial
statements, wherein such case (2) it did not, due to the change
in accountants or for any other reason, expand the scope of its
audit or conduct such further investigation; or
(D) that information had come to its attention that it had concluded
materially impacts 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 period(s) subsequent to the date of
the most recent financial statements covered by an audit report.
(vi) The Registrant has requested Andersen to provide a letter addressed
to the Securities and Exchange Commission stating whether it agrees
with the statements set forth above. A copy of Andersen's letter to
the Securities and Exchange Commission is filed as Exhibit 16 to this
Form 8-K.
A(2) Engagement of New Independent Accountant
(i) The Registrant is currently discussing the retention of another Big 5
accounting firm.
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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 hereunto duly authorized.
DELPHI INFORMATION SYSTEMS, INC.
/s/Max Seybold
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Max Seybold
President and Chief Executive Officer
Date: May 14, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
16.1 Letter from Arthur Andersen LLP to the Securities and
Exchange Commission pursuant to Item 304(a)(3) of Regulation S-K.
</TABLE>
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Exhibit 16.1 Letter from Arthur Andersen LLP to the Securities and Exchange
Commission pursuant to Item 304(a)(3) of Regulation S-K.
(ARTHUR ANDERSEN LETTERHEAD)
May 14, 1999
Office of the Chief Accountant
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
Dear Sir/Madam:
We have read the paragraphs of Item 4(a)(1) included in the Form 8-K dated May
14, 1999 of Delphi Information Systems, Inc. to be filed with the Securities and
Exchange Commission and are in agreement with the statements contained therein.
Very truly yours,
/s/ Arthur Andersen LLP
