SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): September 16, 1999
INFORMATION MANAGEMENT ASSOCIATES, INC.
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(Exact name of registrant as specified in its charter)
Connecticut 001-13211 06-1289928
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
One Corporate Drive, Suite 400, Shelton, Connecticut 06484
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(Address of principal executive offices) (Zip Code)
(203) 925-6800
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(Registrant's telephone number)
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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.
(a) Previous Independent Accountant
(i) On September 16, 1999 Information Management Associates, Inc. (the
"Company") contacted representatives of Arthur Andersen LLP to inform them that
their firm would no longer be engaged as the principal accountant to audit the
Company's financial statements for the year ending December 31, 1999, and
terminated the relationship effective September 16, 1999.
(ii) None of the reports of Arthur Andersen on the financial statements of the
Company for either of the past two fiscal years contained an adverse opinion or
a disclaimer or opinion, or was qualified or modified as to uncertainty, audit
scope or accounting principles.
(iii) The decision to change accountants was recommended by the Company's
management and approved by the Company's Audit Committee and the Company's Board
of Directors.
(iv) During the Company's two most recent fiscal years and subsequent interim
periods preceding the termination of Arthur Andersen, there were no
disagreements with Arthur Andersen on any matter of accounting principle or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Arthur Andersen, would
have caused it to make reference to the subject matter of disagreement in
connection with its report except as follows: in the course of preparing the
Company's Form 10-Q for the quarter ended September 30, 1998, the Company and
Arthur Andersen engaged in a number of discussions regarding the appropriate
amount of the bad debt reserve to be recorded for such period. Arthur Andersen
recommended a higher reserve than the Company initially proposed. Based upon
further consideration of the facts and Arthur Andersen's analysis and
recommendation, management concurred that the final amount of the bad debt
reserve to be recorded for the quarter should be in accordance with Arthur
Andersen's recommendation.
(v) During the Company's most recent fiscal year, no "reportable events" (as
described in Item 304(a)(1)(v) of regulation S-K) have occurred, except for
Arthur Andersen's communication to the Company's Audit Committee in connection
with its audit of the Company's financial statements for the fiscal year ended
December 31, 1998 that the Company's accounting procedures reflected a material
weakness relating to lack of enforcement of receivable obligations and
inadequate accounting oversight in accounting for non-standard transactions.
These matters were considered by Arthur Andersen during its audit and did not
modify the opinion expressed by Arthur Andersen in its auditor's report dated
March 3, 1999.
(vi) The Company requested that Arthur Andersen furnish a letter addressed to
the Securities and Exchange Commission ("SEC") stating whether or not it agrees
with the statements made by the Company in response to Item 304 of Regulation
S-K. Arthur Andersen's letter is included as an Exhibit to this Form 8-K.
(b) New Independent Accountants
(i) The Company engaged PriceWaterhouseCoopers LLP as its new independent
accountants effective as of September 23, 1999. During the most recent fiscal
year and through September 22, 1999, the Company has not consulted with
PriceWaterhouseCoopers concerning their financial statements, including the
following items: an audit of the Company's financial statements as the principal
accountant, an audit of a significant subsidiary as an independent accountant,
the application of accounting principles to a specified transaction or the type
of audit opinion that might be rendered on the Company's financial statements or
any matter which concerned a disagreement or "reportable event" with the
previous independent accountants.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(c) Exhibits.
16.1 Letter of Arthur Andersen LLP, dated September 23, 1999, to the
Securities and Exchange Commission.
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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.
INFORMATION MANAGEMENT ASSOCIATES, INC.
(Registrant)
/s/ John A. Piontkowski
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Chief Financial Officer
(Principal Accounting Officer)
Date: September 23, 1999
Exhibit 16.1
[Arthur Andersen LLP letterhead and logo]
September 23, 1999
Office of the Chief Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Ladies and Gentlemen:
We have read the (a)(i), (a)(ii), (a)(iv), (a)(v) and (a)(vi) paragraphs of Item
4 included in the Form 8-K dated September 23, 1999 of Information Management
Associates, Inc. filed on September 23, 1999 with the Securities and Exchange
Commission and are in agreement with the statements contained therein.
/s/ Arthur Andersen LLP
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Arthur Andersen LLP
Arthur Andersen LLP
Hartford, CT.
September 23,1999
Copy to:
Mr. John A. Piontkowski, Information Management Associates, Inc.
