Mercury Finance Switching Auditors

Mercury Finance, the subprime auto lender, announced Tuesday that it will replace its auditor, KPMG Peat Marwick, with Arthur Andersen LLP.

The move comes on the heels of a restatement of earnings for the last several years and the departure of Mercury's comptroller, which touched off a federal investigation.

In a written statement, chief executive William Brandt said Mercury would be "best served by a new public accounting firm, which can bring a fresh independent point of view to the situation."

KPMG said in a written response that it was disappointed with the decision. It said it had discovered accounting irregularities while conducting its 1996 audit and notified Mercury's board.

Arthur Andersen will be conducting a forensic audit that will examine Mercury's books for the last four years, said a source close to the lender. The in-depth review is necessary for Mercury to secure the long-term financing it needs to avoid bankruptcy, he said.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER