Presidential Life Corporation Announces Change in Independent Registered Accounting Firm

Strategic Insights -

Presidential Life Corporation has announced a change in its independent registered accounting firm, dismissing Deloitte & Touche LLP and appointing BDO Seidman, LLP to replace them. This change was approved by the Audit Committee of the Registrant's Board of Directors. The dismissal and appointment are part of a broader effort to address material weaknesses in the company's internal control over financial reporting.

Key Takeaways:

  • The change in accounting firm was made to address material weaknesses in Presidential Life Corporation's internal control over financial reporting, including inadequate resources and processes to assess emerging accounting standards and evaluate complex transactions.
  • The company has restated its consolidated financial statements from 1997 to 2003 to effectuate the consolidations and write downs of certain principal protected notes.
  • The audit reports of Deloitte & Touche LLP with respect to the Registrant's consolidated financial statements for the past two fiscal years have not contained an adverse opinion or a disclaimer of an opinion, but did contain an explanatory paragraph regarding the previously reported restatement of the 2003 and 2002 financial statements.
  • The audit report of Deloitte & Touche LLP with respect to the Registrant's Internal Control Over Financial Reporting ("ICFR") in the Annual Report on Form 10-K/A for the year ended December 31, 2004 contained an unqualified opinion on management's assessment and an adverse opinion on the effectiveness of ICFR.
  • Presidential Life Corporation has engaged BDO Seidman, LLP to advise on the accounting rules applicable to its investments in principal protected notes and to provide a letter to the Securities and Exchange Commission stating that they agree with the disclosure made by the Registrant.
  • The company has provided both Deloitte & Touche LLP and BDO Seidman, LLP with a copy of the Form 8-K and requested that each furnish a letter to the Securities and Exchange Commission stating whether they agree with the disclosure made by the Registrant.

Statistics:

  • Presidential Life Corporation restated its consolidated financial statements from 1997 to 2003.
  • The company has identified material weaknesses in its internal control over financial reporting.
  • Deloitte & Touche LLP's audit reports for the past two fiscal years contained an explanatory paragraph regarding the previously reported restatement of the 2003 and 2002 financial statements.
  • BDO Seidman, LLP was engaged to advise on the accounting rules applicable to Presidential Life Corporation's investments in principal protected notes.

Sources:

  • Securities and Exchange Commission (SEC), Form 8-K, dated September 12, 2005.
  • Deloitte & Touche LLP, letter dated September 12, 2005, filed as Exhibit 16.1 to the Form 8-K.
  • BDO Seidman, LLP, letter dated September 12, 2005, filed as Exhibit 16.2 to the Form 8-K.