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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): July 23, 1997
COMPUTRON SOFTWARE, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-26358 13-2966911
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
301 Route 17 North
Rutherford, New Jersey 07070
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 935-3400
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N/A
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(Former name or former address, if changed since last report)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) On July 23, 1997, at the recommendation of its Audit Committee, the
Board of Directors of Computron Software, Inc. (the "Company") approved the
dismissal and replacement of Arthur Andersen LLP ("AA") as the Company's
certifying independent accountant with KPMG Peat Marwick LLP ("KPMG").
Working in conjunction with AA, the Company restated its consolidated financial
statements for the year ended December 31, 1995, and certain unaudited quarters
therein, and for each of the three unaudited quarters ended September 30, 1996.
In the opinion of management, all material adjustments necessary to correct the
financial statements have been recorded.
AA's audit report on the Company's restated financial statements for the 1995
fiscal year, and on the Company's financial statements for the 1996 fiscal year,
did not contain an adverse opinion or a disclaimer of opinion, nor was such
report qualified or modified as to uncertainty, audit scope or accounting
principles.
During the Company's 1995 and 1996 fiscal years, and thereafter, there was no
disagreement with AA on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of AA, would have caused AA
to make a reference to the subject matter of the disagreement in connection with
its reports.
Upon completion of each of the 1995 and 1996 audits, the Company received a
management letter from AA that identified material weaknesses in the Company's
financial and accounting processes, controls, reporting systems and procedures.
In its 1995 letter, AA (i) highlighted the Company's need for additional
financial and accounting personnel with software industry experience, (ii)
noted the need for uniformity in the language of its contracts and recommended
that the Company standardize the terms of its license agreements and expand its
internal contract review and approval procedures, (iii) noted deficiencies in
the organization of customer and contract files and recommended that the
Company improve and standardize record keeping, (iv) noted the need for
expanded and formalized accounts receivable collection procedures, (v) noted
the need for improved documentation and record keeping relating to consulting
service projects, (vi) noted the need to develop policies and procedures to
accurately identify the date when technological feasibility of developed
software has been attained and to improve the documentation and record keeping
for capitalized software costs and to do so on a timely basis, and (vii)
recommended that the Company implement improved internal accounting control
procedures approved by the Audit Committee of the Board of Directors and
reorganize and upgrade the contracts administration processes, procedures and
personnel to ensure proper revenue recognition and financial reporting.
In its 1996 letter, AA (i) noted the continued turnover of Company's financial
management, (ii) recommended that the Company continue to standardize the terms
of its license agreements and expand its internal contract review and approval
procedures on a worldwide basis, (iii) noted the need for improved
documentation and record keeping relating to consulting service and
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maintenance projects, (iv) recommended that the Company establish a formal list
of products in general release, (v) recommended that the Company establish
written policies with regard to activities in its foreign locations, and (vi)
recommended that the Company establish formal policies and procedures regarding
the preparation and review of the consolidation and reconciliation of
inter-company accounts and foreign subsidiaries.
The Company's senior executive officers and members of the Audit Committee of
the Company's Board of Directors have participated in discussions with AA
concerning the specific matters described above. The Company has recently hired
senior executives with software industry experience, including a Chief
Executive Officer, Chief Financial Officer, Vice President - Finance and
Administration, Corporate Controller, several country Controllers and a
Corporate Counsel. In addition, the Company (1) has established a worldwide
contract review and administration process and is continuing to standardize the
terms of its license agreements, (2) has formalized the worldwide consolidation
and reporting process, (3) is formalizing policy with regard to activities in
foreign locations, (4) is formalizing the product release process, and (5) is
implementing the latest version of Computron financials as part of a plan to
improve record keeping relating to consulting service and maintenance.
The Company has authorized AA to respond fully to any and all inquiries made by
KPMG concerning the subject matter of each of the matters described above.
The Company has provided AA with a copy of this Form 8-K, and has requested AA
to furnish a letter addressed to the Securities and Exchange Commission stating
whether it agrees with the above statements. A copy of AA's letter is filed as
an exhibit to this Form 8-K pursuant to Item 304(a)(3) of Regulation S-K.
(b) On July 23, 1997, on the recommendation of its Audit Committee, the Board
of Directors of the Company engaged KPMG Peat Marwick LLP ("KPMG") as the
Company's certifying independent accountant for the 1997 fiscal year.
During the Company's 1995 and 1996 fiscal years, and the subsequent interim
period prior to such engagement of KPMG, the Company did not consult with KPMG
regarding either (i) the application of accounting principles to a specified
transaction, either completed or proposed, (ii) the type of audit opinion that
might be rendered on the Company's financial statements, or (iii) items which
concerned the subject matter of any disagreement with AA or any reportable
event, as described in Item 304(a)(2) of Regulation S-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
16.1 Letter from Arthur Andersen LLP pursuant to Item 304(a)(3) of
Regulation S-K.
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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.
COMPUTRON SOFTWARE, INC.
Date: July 28, 1997 By: /s/ MICHAEL R. JORGENSEN
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Michael R. Jorgensen
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
16.1 Letter from Arthur Andersen LLP pursuant to Item 304(a)(3) of Regulation
S-K.
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EXHIBIT 16.1
ARTHUR
ANDERSEN
July 25, 1997 ____________________
Arthur Andersen LLP
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225 Franklin Street
Boston MA 02110-2812
617 330 4000
Office Of Chief Accountants
SECPS Letter File
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We have read the first four paragraphs of Item 4(a) included in the attached
Form 8-K dated July 23, 1997 of Computron Software, 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
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Arthur Andersen LLP
