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Aviation's Accounting Firm Resigns

September 10, 1997|P.J. Huffstutter

Aviation Distributors Inc.'s former accounting firm said it resigned after learning that the Irvine-based aircraft parts distributor allegedly submitted false sales figures to obtain a bank loan, the company acknowledged. In documents filed late Monday with the Securities and Exchange Commission, Arthur Andersen alleged that Aviation employees submitted false documentation to Far East National Bank, then supplied inaccurate records to the accounting firm to cover the financial discrepancies. The alleged inconsistencies may have had an impact on Aviation's 1996 financial statements, which were used to gauge the aerospace reseller in its initial public stock offering in March. The company said in the filing that it is addressing the issues raised by the accounting firm, but it declined to elaborate. Last week, Arthur Andersen resigned and withdrew its reports on the company's financial reports for the last three years, prompting Nasdaq officials to halt trading of the company's stock.

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