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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 2
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 9, 1997
GILMAN & CIOCIA, INC.
(Name of small business issuer in its charter)
Delaware 000-22996 11-2587324
(State or jurisdiction Commission (I.R.S.Employer
of incorporation or file Identification
organization) number No.)
475 Northern Boulevard, Great Neck, NY 11021
(Address of principal executive offices) (Zip Code)
(516) 482-4860
(Issuer's Telephone Number, Including Area Code)
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ITEM 4. Changes in Registrant's Certifying Accountant.
This Amendment No. 2 to Form 8-K supersedes the Form 8-K dated
September 9, 1997 (filed September 16, 1997) and Amendment No. 1 thereto. BDO
Seidman, LLP ("BDO") was dismissed as the principal independent accountants of
Gilman & Ciocia, Inc. (the "Company") as of September 9, 1997. Such former
principal accountant's report on the financial statements of the Company for the
prior year did not contain an adverse opinion or disclaimer of opinion, and was
not modified as to uncertainty, audit scope or accounting principles. The
decision to replace the Company's independent accountants was made by the
Company's Board of Directors. There was no disagreement with the former
accountants, either that was resolved or that remained unresolved, on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure.
On September 9, 1997, the Company engaged Arthur Andersen, LLP as its
new principal independent accountants.
BDO did not inform the Company that any information had come to the
attention of BDO which made the accountant unwilling to rely on management's
representations, or unwilling to be associated with the financial statements
prepared by management. BDO also did not advise the Company that any information
had come to its attention that BDO had concluded will, or upon further
investigation would, materially impact the fairness or reliability of the
previously issued audit report or any underlying financial statements for the
year ended June 30, 1996.
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BDO did provide to the Company a draft of a management letter that
listed areas in the Company's internal control that BDO felt should be improved
in order to protect the Company's assets and make its accounting controls more
efficient, which were noted during the course of its audit of the Company's
financial statements for the year ended June 30, 1996.
The Company's Audit Committee met to discuss the draft of the
management letter, and on October 6, 1997, met again with the Company's new
principal independent accountants and the Company's outside accounting
consultants to discuss the concerns raised in such letter. The Company has taken
and will be taking steps to improve its internal controls and accounting
functions.
The matters raised in BDO's draft of a management letter that BDO
subsequently informed the Company could be material were: (i) the absence of
corporate minutes approving the compensation to officers/stockholders; (ii) the
lack of complete support for the recording of proper accounts receivable records
and complete adequate records to support the recording of certain transactions
to the general ledger; (iii) the inadequate formal review process in some areas
by management; (iv) the lack of segregation of duties among employees in certain
areas; and (v) the need for the Company's personnel to increase their knowledge
and familiarity with existing and recently issued accounting pronouncements, tax
law and SEC regulations. In addition, board of directors consents granting stock
options, which were filed at the Company's counsel's office, were not available
at the Company's office on a timely basis.
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These matters resulted in BDO's performing additional accounting and
auditing procedures to enable them to complete their audit. In addition, in the
course of its audit, BDO proposed audit adjustments, most of which were recorded
by the Company. The proposed audit adjustments that were not recorded were
clearly immaterial.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
16 Letter from BDO Seidman, LLP to the
Securities & Exchange Commission
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Amendment No. 2 to the report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: November 12, 1997
GILMAN & CIOCIA, INC.
By:/s/ Thomas Povinelli
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Thomas Povinelli
Vice President (authorized signatory)
Chief Operating Officer
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[BDO Seidman, LLP Letterhead]
November 24, 1997
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Gentlemen:
We have been furnished with a copy of the response to Item 4 of Amendment to
Form 8-K for the change in accountants, to be filed by our former client,
Gilman & Ciocia, Inc. We agree with the statements made in response to that
Item insofar as they relate to our Firm, except as it relates that the
following:
We are not aware of any matters that were discussed at the company's audit
committee meetings, referred to in the Form 8-K.
Very truly yours,
/s/ BDO SEIDMAN, LLP
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BDO Seidman, LLP
