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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
October 4, 2002
COMMUNITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware 63-0868361
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
68149 Main Street
Blountsville, Alabama 35031
(Address of principal executive offices)
(205) 429-1000
(Registrant's telephone number)
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ITEM 4: CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On April 11, 2002, Community Bank, a subsidiary of the Company, requested
approval from the Alabama Banking Department (the "Department") for Dudley,
Hopton-Jones, Sims & Freeman PLLP ("Dudley Hopton") to serve as Community Bank's
independent auditor for the fiscal years ending December 31, 2002 and 2003.
Dudley Hopton had previously been approved to serve, and had served, in that
capacity for fiscal years 2000 and 2001. Dudley Hopton had also served during
that period as the independent auditor for the Company. By letter dated August
1, 2002, the Department declined the request and disapproved Dudley Hopton as
the Banks's independent auditor prospectively for purposes of auditing the
Bank's annual financial statements for the years ending December 31, 2002 and
2003. The Department did not disapprove Dudley Hopton retroactively or
prospectively for purposes of the firm's review of interim financial statements.
Moreover, the Department exercises no jurisdiction over the Company. Therefore,
its disapproval of Dudley Hopton as the Bank's independent auditor of annual
financial statements for the years ending December 31, 2002 and 2003 did not
disapprove Dudley Hopton as the Company's independent auditor.
The reasons for the disapproval given in the Department's letter to
Community Bank were unspecified "concerns about the conclusions reached" by
Dudley Hopton in connection with the 2001 audit of Community Bank and certain
unspecified "issues from past audits". On October 4, 2002, Dudley Hopton
tendered its resignation as the Bank's and the Company's independent auditor.
Thereupon, the Bank engaged Carr, Riggs & Ingram, L.L.P. ("Carr Riggs") to serve
in that capacity. The Department has approved Carr Riggs to serve as the Bank's
independent auditor. During fiscal years 2000 and 2001 and the first three
quarters of 2002, neither the Bank nor the Company consulted with Carr Riggs for
any purpose.
On October 4, 2002, the Audit Committee of the Board of Directors of the
Company accepted Dudley Hopton's resignation and determined that Carr Riggs
should be engaged to serve as the Company's independent auditor. The Chairman of
the Audit Committee executed an engagement letter with Carr Riggs on October 4,
2002, and the Board of Directors ratified the engagement on the same day. Carr
Riggs will review the Company's interim financial statements for the period
ended September 30, 2002. In accordance with American Institute of Certified
Public Accountants Professional Standards Section 315, Carr Riggs will request
access to and perform a review of the 2001 audit work papers of the predecessor
auditor. The purpose of the review will be solely to obtain an understanding of
Community Bancshares, Inc. and certain information about the 2001 audit, in
order to plan the 2002 audit. In accordance with regulatory policy applicable to
Community Bank, federal and Alabama regulatory personnel conducted a required
review of Dudley's Hopton's audit documentation related to its audit of the
Company's consolidated financial statements for 2001. On or about August 12,
2002, regulatory personnel informed Dudley Hopton that its scope of work did not
include consideration of loan review reports containing information pertinent to
the allowance for loan losses. In response to the foregoing, Dudley Hopton
undertook measures to seek and evaluate such information. This process is not a
re-examination of a portion of the 2001 audit, but rather an initial examination
of information which possibly existed at the date of the accountants' report,
but which was not known by the accountant to exist at such date. The Company
expects to confer with Dudley Hopton when such work is completed.
Neither of Dudley Hopton's reports on the Company's financial statements
for 2000 or 2001 contained an adverse opinion or a disclaimer of opinion or was
qualified or modified as to uncertainty, audit scope, or accounting principles.
During fiscal years 2000, 2001 and the through October 4, 2002, there were no
disagreements between the Company and Dudley Hopton on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure. The Company has provided Dudley Hopton with a copy of this Report and
requested that Dudley Hopton provide it with a letter addressed to the
Securities and Exchange Commission stating that Dudley Hopton agrees with the
statements made herein.
Item 7. Exhibits
16 Letter re: Change in Certifying Accountant
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.
COMMUNITY BANCSHARES, INC.
Date: November 5, 2002 By: /s/ Kerri Newton
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Kerri Newton
Chief Financial Officer