Universal Health Services said the Securities and Exchange Commission's Philadelphia office has begun an informal inquiry into the dismissal of Kirk Gorman as chief financial officer.
Gorman, who plans to remain at King of Prussia, Pa.-based UHS until a new CFO is chosen, was ousted from that job after the company's auditor, KPMG, expressed reservations about him.The reservations were related to Gorman's theoretical views about the split of duties and responsibilities between the CFO and the auditor, UHS said. The company last week released two letters from Gorman in an attempt to shed light on his dismissal. Both letters were addressed to the Philadelphia office of KPMG, UHS' new auditing firm, and they describe what Gorman last week referred to as "philosophical differences." UHS hired KPMG last year after it dismissed former auditor Arthur Andersen.
In the first letter, dated Dec. 12, 2002, Gorman noted that he is "neither a certified public accountant nor a securities lawyer" and that leads him to "rely upon KPMG to ensure that our financial statements ... are in compliance with (generally accepted accounting principles) and securities regulations." In a letter dated Feb. 10, Gorman sought to clarify his position. He wrote that he had not intended to leave the impression that he doubted the veracity of the company's financial statements or that he wanted to shift responsibility for the statements' accuracy to KPMG. Nevertheless, KPMG expressed qualms about relying on Gorman, who joined UHS in 1987, so the board decided to dismiss him, UHS said.